MESSAGE FROM THE QUEEN

Queen's Speech (Answer To Address)

The Vice-Chamberlain Of The Household reported Her Majesty's Answer to the Address, as follows:
	 I have received with great satisfaction the dutiful and loyal expression of your thanks for the Speech with which I opened the present Session of Parliament.

Oral Answers to Questions

INTERNATIONAL DEVELOPMENT

The Secretary of State was asked—

Nigeria

Andrew Gwynne: What assessment he has made of the effect of debt relief granted by the UK on the Nigerian Government's expenditure on welfare programmes.

Hilary Benn: The Nigerian debt relief deal has released $1 billion a year for the country to spend on reducing poverty. A virtual poverty fund has been established to track the expenditure of these debt relief savings. Some 145,000 teachers have been retrained, and the recruitment of 40,000 new teachers, the construction of clinics and roads, and the creation of bore holes is now under way.

Andrew Gwynne: I welcome that, but given the wide range of challenges still faced by the Nigerian Government, such as the fact that 7 million children receive no schooling and one in five dies before the age of five, what assurances has my right hon. Friend been given that the Nigerian Government are using the financial flexibility that debt relief has provided to ensure that the key issues of health and education are tackled head-on?

Hilary Benn: Britain worked very hard to achieve this debt deal, which the Nigerian Government wanted—indeed, we played a leading role—and I share my hon. Friend's concern that the benefits should be felt by the people of Nigeria. That is why I welcome the establishment of the virtual poverty fund, which is overseen in part by non-governmental organisations in Nigeria. They recognise the progress that the Nigerian Government are making, but my hon. Friend is right—Nigeria is home to 20 per cent. of the children in Africa who are out of school, and 20 per cent. of the poor people of the sub-Saharan continent of Africa. There is a long, long way to go before their lives begin to change for the better.

Gary Streeter: Given our support for debt relief and our positive development aid for Nigeria—I greatly welcome that, and I congratulate the Secretary of State on all he is doing—will he bring his influence to bear to ensure that next year's presidential elections are not cancelled by the existing President, as is being threatened, and that they do take place, so that good governance and welfare support for the people of Nigeria can continue?

Hilary Benn: I am very happy to give that assurance. We are already providing some financial support to help civil society organisations prepare for the elections, monitor registration, encourage greater participation by women and provide technical assistance. This is a very important test of the very young democracy in Nigeria. Will the elections be perfect? I doubt it, but they need to take place because they will, in themselves, represent progress, and the huge population of Nigeria want the chance to express a view on how they will be governed in future. I agree with the hon. Gentleman that it is very important that those elections take place.

John Robertson: I congratulate my right hon. Friend on the work that the Department for International Development is doing in Nigeria. My all-party group has recently returned from a visit to a village just outside Abuja, where school roofs are being re-done. DFID is supplying equipment for those schools and I congratulate him on that, but can he use his offices to put some pressure on the elected representatives of such areas, so that they realise that they have to become accountable to the people whom they represent?

Hilary Benn: I am grateful to my hon. Friend for sending me a letter about that visit, and I look forward to meeting him and those of his colleagues who travelled with him to Nigeria to hear at first hand about their experiences. I also pay tribute to the interest that he takes in Nigeria and its future. It is very important that we do that, which is why our work in the south of the country—in the delta states—includes a programme that we launched this year to support better Government accountability. The delta states get higher income per head in recognition of their oil wealth, but the really big issue in Nigeria is indeed the one that my hon. Friend draws the House's attention to: accountability. That is why the elections matter and why enabling people to have their voice heard matters. That is the best way for the country to resolve its problems, to get more children into school and to reduce the number who die needlessly.

Mark Simmonds: The Opposition remain supportive of the Paris Club's deal on reducing debt. While in Nigeria, I was encouraged by the additional investment being made, as other Members have said, in public services as a result of the extra resources that are available. However, this progress is predicated on the continuance of democratic institutions and, most immediately, on next year's elections. DFID currently funds voter registration, but with minimal tangible success. Just 2 million out of 70 million possible electors have been registered, thereby jeopardising the elections. What is DFID's strategy to put pressure on the Nigerian Government to ensure that these elections take place, and to increase the amount of domestic legislation and the level of public procurement and fiscal transparency initiated by the Nigerian Government, in order to ensure the confidence not just of the international community, but more importantly, of the Nigerian people themselves?

Hilary Benn: I recognise the scale of the challenge to ensure that the elections take place successfully and that people have the chance to participate in them. I assure the hon. Gentleman that the Government will continue to encourage the Nigerian Government to make sure that everyone has that chance. His second point is also important, as it is about good governance. Fighting corruption and improving financial management are essential to Nigeria making progress. That is why we have supported the extractive industries transparency initiative, and I welcome the fact that one state governor is currently on trial. In the Dariye case, the High Court yesterday ruled that £1 million of assets that were in London can now be returned to Nigeria. That shows what needs to happen: if money is stolen, we must play our part in returning it to the people from whom it was thieved in the first place. Nigeria can contribute by impeaching governors accused of corruption on a case-by-case basis. I can see no reason why anyone who holds public office in Nigeria should be exempt from prosecution if there are grounds to think that that person has broken the law. That has been discussed in Nigeria's constitutional commission. Although no progress has yet been made, I very much hope that it will.

Somalia

Dawn Butler: What aid his Department provided to Somalia in 2005-06; and if he will make a statement.

Hilary Benn: My Department provided £18.75 million of assistance to Somalia in 2005-06. More than 80 per cent. of that was humanitarian assistance in response to the drought in the region and other needs. The remainder went on education, health and promoting improved governance and the rule of law—all things that Somalia desperately needs.

Dawn Butler: I thank my right hon. Friend for that response, and for the money that the Government are investing in Somalia. My constituency of Brent has nearly 20,000 Somalian people, one of the highest concentrations of that community in the country. All are concerned about imminent war, and wonder what this Government will do to try to help progress the peace process.

Hilary Benn: We are encouraging the transitional institutions, to which we are providing modest support, and the Islamic courts to talk about the country's future and not to return to violence. In effect, Somalia has been destroyed by 15 years of conflict. One consequence of the failure of governance is that 80 per cent. of children there have never seen the inside of a primary school classroom. Discussions are taking place in the UN Security Council about whether a support and training mission for the transitional institutions should be set up. The states belonging to the intergovernmental authority on development have made proposals for a peace and support operation, but the central message that all parties in Somalia need to hear from the rest of the world is that the only way forward is to sit down and talk through the problems. The route to disaster would be to return to the violence that has destroyed Somalia.

Susan Kramer: The Secretary of State referred to the US draft resolution that would give the intergovernmental authority on development in Somalia the power to bring in peacekeeping troops, and which includes a partial lifting of the arms embargo. The Arab League is facilitating the peace talks but is concerned that the resolution could spark an expansion of serious civil war in Somalia and lead to a broader regional conflict. Will he do what he can to ensure that the focus is on making the peace talks effective and that military force is used to support a ceasefire instead of creating further conflict?

Hilary Benn: I agree completely. The situation is very delicate and volatile. The hon. Lady has set out precisely the matters that the UN Security Council will take into account when considering the US resolution. As IGAD itself has said, it is very important that front-line states are not involved in support and training missions. We support the transitional institutions, and it is right to help them build their capacity. However, that needs to be done in a way that does not lead to the consequences that she has described, as that would be a disaster. When she gets an opportunity to read the resolution, she will see that it lays a heavy emphasis on the peace negotiations that have been taking place in Khartoum. As I said earlier, the peace process is the only way forward for Somalia.

Robert Wareing: Given the instability in Somalia, how sure is my right hon. Friend that the excellent assistance that we are giving is getting to the people for whom it is intended? Are there differences in how assistance is distributed in the area around Berbera, for instance, as compared with Baidoa? Is not the north of the country rather more stable?

Hilary Benn: Precisely because there has been no functioning Government in Somalia for a long period, almost all the assistance we give goes through tried and trusted partners, in particular UN agencies and non-governmental organisations. We have provided assistance for drought relief, and I saw some of that work myself when I went to Wajid in Somalia, and to Baidoa, in May, where very brave people are being very creative, in very dangerous circumstances, in delivering aid to people. The fact that there was no great death toll after that terrible drought is entirely down to the effort of UN agencies and their heroic staff. We are currently providing support because it started to rain in large amountsand there has been flooding, in particular aroundBelet Weyne. In the middle of last month, we provided £2 million. We are also working in partnership with UNICEF. As I pointed out earlier, most children in Somalia have never had the chance to go to school, so we have a £6 million education partnership with UNICEF and UNESCO to try to enable some of the children in that country to have the best start in life, which is to get into a classroom with a teacher.

Cheap Medicines

Tony Baldry: What steps he is taking to give poor countries access to cheaper drugs and medicines; and if he will make a statement.

Gareth Thomas: We are providing more finance to help countries get the medicines they need, to help leverage lower prices and to increase the range of medicines available. We back research into neglected diseases, and we support new and innovative ways of improving the supply of cheaper drugs and vaccinations through, for example, UNITAID—the joint UN programme on HIV/AIDS—advanced market commitments and the international finance facility for immunisation.

Tony Baldry: What does the Minister say to the recent Oxfam report which asserts that a number of drug companies and certain Governments are blocking poorer countries' access to affordable and much needed medicines, and that the Doha declaration of November 2001 is simply being ignored? As the Minister knows, the "Stop AIDS" campaign coalition of non-governmental organisations wants the UK Government to champion the issue at next year's G8 summit. Will they?

Gareth Thomas: Let me make it clear to the hon. Gentleman that we do not support attempts to go beyond the TRIPS—trade-related intellectual property rights—deal that was negotiated last year. We are clear about that and, in particular, we want American drug companies to desist from advocating such attempts. We think that there are many positive moves to implement the flexibilities agreed under TRIPS—the recent decision by the Thai Government, for example, is particularly interesting. The Brazilian Government, too, have used flexibilities under the TRIPS deal to negotiate lower prices, but we certainly do not support any attempt to go beyond that deal.

Lindsay Hoyle: I am sure that my hon. Friend is well aware that tuberculosis is still rife in poor countries and that new strains are making the disease more serious. New drugs are being developed, but will he ensure that they are available to poor countries through our DFID programmes?

Gareth Thomas: My hon. Friend is right to highlight the emergence of worrying strains of extreme drug-resistant TB. As a result, we were asked to provide further funding to help the World Health Organisation "Stop TB" programme to carry out more research intonew drugs, and we have recently provided a further£1.6 million, bringing our total support for the WHO programme to about £7 million. I share my hon. Friend's view that new drugs need to be developed urgently to help combat extreme drug-resistant TB and that we need significant improvement in the management of TB control programmes, because poor management of them contributes to TB strains being untreatable.

Malcolm Bruce: Will the Minister accept that we need not only to reduce the price of drugs for all AIDS victims but to target marginalised groups, such as sex workers, men who have sex with men, injecting drug users and prisoners, to ensure that they have access to programmes that will help them to stop being the drivers of the epidemic? Only in that way will we reverse and eliminate the rising scourge of AIDS.

Gareth Thomas: The hon. Gentleman makes an important point. We not only need to get the price of drugs down; a series of other measures are needed to make drugs better available to all who need them. He is right to say that there must be an increased focus on marginalised groups, such as men who have sex with men, injecting drug users and people in prison.

Chris McCafferty: Does the Minister agree that access to cheaper reproductive health commodities is also vital to reduce morbidity and mortality, particularly in Africa, where 500,000 women die every year from preventable causes related to pregnancy and childbirth?

Gareth Thomas: I agree with my hon. Friend. She is absolutely right to say that there is a considerable shortage of sexual and reproductive health commodities in developing countries, particularly in sub-Saharan Africa. That is one of the reasons why we work as closely as we do with the United Nations Population Fund and with the International Planned Parenthood Federation. The UNFPA is leading a process to discover what more we can do to increase the supply of reproductive health commodities. We are co-operating extremely closely in that work.

Andrew Mitchell: The Secretary of State and his Minister know that many developing countries are still imposing tariffs and taxes on the importation of life-saving medicines. As part of his efforts to revive the Doha trade round, what steps is the Minister taking to encourage the removal of what are effectively killer tariffs and thereby reduce the costs for poor people?

Gareth Thomas: As the hon. Gentleman knows, a whole series of steps are under way to try to inject new momentum into the World Trade Organisation round. My right hon. Friend the Prime Minister has held a series of conversations with the key players to get some movement. We are pleased that Pascal Lamy, the head of the WTO, has restarted the negotiations. We need all sides to give ground. On the specific issue of additional taxes and tariffs placed on essential medicines, the hon. Gentleman is right that we need greater transparency about their impact, which is one of the reasons why we are in discussions with a series of developing countries, a series of pharmaceutical companies and, indeed, other players about what further steps we can take to increase that transparency on taxes and tariffs.

Andrew Mitchell: I thank the Minister for that constructive reply. While we all rightly focus on the availability of inexpensive drugs and medicines, is it not the case that inadequate attention is being paid to delivering them on a continuing basis on the ground to people in remote areas who urgently need them? Will the Minister reassure the House that he is absolutely seized of that point and is focusing on those delivery mechanisms?

Gareth Thomas: The hon. Gentleman rightly highlights a key issue. If we are to get cheaper drugs into rural areas and to people who find it difficult to get access to them more widely, we need to improve the quality of health systems more generally in many developing countries. We are working to improve those health systems. For example, we are actively working with the Government of Malawi to pay for an increase in the number of nurses and doctors over a six-year period. We are increasing the nurses' salary, and since April, when the programme came into effect, we have seen a slow but significant increase in the number of nurses being recruited. That gives us hope that we will see the key essential drugs being delivered to where they need to go.

Sally Keeble: What progress is being made in ensuring that children get proper access to cheap drugs? In particular, what progress has been made in preparing paediatric antiretroviral formulae and antibiotics for babies and infants at risk of acquiring HIV?

Gareth Thomas: I pay tribute to my hon. Friend's campaigning work on these issues. She will already be aware of the research that we fund into finding a more effective paediatric version of antiretroviral therapy. She may also be aware of the funding that we provide to the new international drug purchase facility, UNITAID. She may have heard the recent announcement that, together with the Clinton Foundation, UNITAID has been able to negotiate significantly lower prices for the existing paediatric versions of antiretroviral therapy. We welcome that, but we recognise that there is much more to do if we are to find the essential medicines most appropriate to the needs of children and if we are to get them where they need to go.

Cluster Munitions

Alistair Carmichael: What assessment he has made of the development issues arising from the use of cluster munitions during the recent conflict in Lebanon.

Gareth Thomas: The UN mine centre estimates there are about 1 million unexploded cluster bomblets in southern Lebanon. They obviously pose a continuing threat to life, and it will take an estimated 12 to 15 months to clear them. That is why the UK provided £1.5 million for the clearance of those munitions in the immediate aftermath of the fighting and why my right hon. Friend the Foreign Secretary recently announced a further £1.2 million for the purpose.

Alistair Carmichael: I thank the Minister for that answer, but the humanitarian consequences of the use of cluster munitions in south Lebanon are absolutely desperate. Does he not feel a certain frustration that—while the Government, through his Department, are investing in the clearance programmes in south Lebanon—the Ministry of Defence continues to support and condone the use of cluster munitions, thus ensuring the depressing certainty that next time we go in to clear up the aftermath of a conflict, the situation will be exactly the same?

Gareth Thomas: No, I do not share the hon. Gentleman's view of my colleagues in the Ministry of Defence. They—together with colleagues in the Foreign Office, working with the Department for International Development—have led the effort to make progress in securing a long-term treaty that properly brings in all the major users and producers of cluster munitions. He will know from the statements that have been released on the issue that we are working, first through a group of Government experts, to resolve some of the basic technical questions about cluster munitions that have yet to be resolved. We hope that that will achieve its desired outcome over the next 12 months, so that we can then move forward to the meaningful negotiations that we all want across Whitehall to get the major users and producers into a legally binding treaty.

Khalid Mahmood: Does my hon. Friend agree that the issue is not about how we pay in aid for the clearance of cluster bombs, but about the fact that they should not be used in civilian areas at all? Will he take that fight to the United Nations to ensure that they are not used in civilian areas?

Gareth Thomas: My hon. Friend is absolutely right to say that cluster munitions, where they are used, should be used in line with the principles of international humanitarian law. The humanitarian impact is one of the questions that will be considered by the group of Government experts. As I say, there is an initial 12-month process in which those experts will look at the definitions, as I have described, and we then want to move on, through the UN process, to meaningful long-term negotiations to get all the major users and producers of those munitions bound into an international treaty.

Child Labour

Si�n James: What steps his Department is taking to reduce child labour in Latin America.

Gareth Thomas: Child labour is declining rapidly in Latin Americathe International Labour Organisation suggests by as much as two thirds since 2000. Although those statistics require further examination, there is no doubt about the positive long-term trend. We fund work in Latin America on child labourfor example, through our support for the ILO and UNICEF and our contributions to the World Bank and the Inter-American Development Bank.

Si�n James: I thank my hon. Friend for his answer. He and his Department have been working hard to focus support on the plight of street children in Brazil and Peru [ Interruption. ]

Mr. Speaker: Order. Allow the hon. Lady to be heard.

Si�n James: Will my hon. Friend pay attention, however, to countries such as Guatemala, Colombia and Honduras which have some of the highest numbers of working children in Latin America? Can we not allow them to have a childhood, too?

Gareth Thomas: My hon. Friend is right to highlight the success in Brazil and Peru. In Brazil, we should pay tribute to the Government of President Lula. In reforming the previous system of cash transfer payments, supported by the World Bank, which we fund, he has helped to ensure that grants are given to families to make sure that their children go to school. My hon. Friend is right, however, to say that a substantial challenge remains in many other parts of Latin America, such as Guatemala and Honduras. That is why, through the ILO, we are supporting programmes there that work to reduce the number of children who are still engaged in commercial agriculture, gravel production and the fireworks industry. We will continue to fund the ILO to do that work, and we hope to see further reductions in Guatemala and Honduras in the same way as we have seen them in Brazil.

Philip Hollobone: Will the Minister accept an invitation to visit the charity Casa Alianza, based in Kettering, which is one of the leading national organisations that helps street children in central America?

Gareth Thomas: I welcome the invitation and I would be happy to meet the hon. Gentleman to talk about the organisation, which he clearly knows well. If I am visiting the area, I will happily come to see that charity.

PRIME MINISTER

The Prime Minister was asked

Engagements

Ian Gibson: If he will list his official engagements for Wednesday6 December.

Tony Blair: Before I list my engagements, I am sure that the whole House will join me in sending our condolences to the family and friends of the Royal Marine from 45 Commando who was killed in Afghanistan yesterday. As I saw when I met the troops there some days ago, he was doing an extraordinary job and we can be very proud of him. In addition, I am sure that the whole House will join me in paying tribute to the two members of the East Sussex fire and rescue service, Brian Wembridge and Geoff Wicker, who were killed tackling the fire near Lewes on Sunday. They died protecting their community, and our thoughts and prayers are with their families at this time.
	This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

Ian Gibson: I am sure that we all join my right hon. Friend in the sentiments that he expresses. I am tempted to ask him whether he will bring the boys back home by Christmasbut even with his powers, I do not think that the English cricket team would agree to that. On a more serious note, last Thursday there was a large meeting of the all-party cancer group in the Queen Elizabeth hall, which was well attended. At that meeting, the Secretary of State for Health made everybody feel good about cancer treatments in this country for the future and announced a new cancer strategy, which was welcomed by patient groups, charities and clinicians. That is important. Does my right hon. Friend agree that giving information to patients, from early diagnosis right through to palliative care, empowers them and gives them the choice that we desire them to have?

Tony Blair: My hon. Friend is right to emphasise the importance of keeping patients fully informed, especially in the very difficult circumstances when they are diagnosed with cancer. He is right to point out that, over the past few years, there has been enormous progress. Not only are we spending about 600 million more, but there are 1,500 more consultant posts. Most importantly, almost 100 per cent. of people are now seen within two weeks by a consultant when they are suspected of having cancerup from two thirds a few years back. As a result of the cancer strategy, which, as my hon. Friend indicates, we are now taking forward, about 50,000 lives have been savedas a result of the improvements in treatment. That is a national health service that is getting better all the time.

David Cameron: I join the Prime Minister in paying tribute to the Royal Marine who was killed yesterday in Afghanistan, and I associate this side of the House with what he said about the East Sussex fire service and the two brave men who lost their lives.
	Our troops in Iraq and Afghanistan are doing a heroic job in difficult circumstances, as I have seen for myself in both places. Yesterday, the new US Defence Secretary said that we were not winning the war in Iraq. Does the Prime Minister share that very serious assessment?

Tony Blair: Of course: in July I said myself that the situation in Baghdad, with sectarian killing, was appalling and that the bloodshed was appalling. What is important, however, as the Defence Secretary went on to say, is that we go on to succeed in the mission that we have set ourselves. The most important thing is to understand why this problem has come about. It has come about because outside extremists are linking up with internal extremists to thwart the will of the Iraqi people, expressed in their election, for a non-sectarian Government and a non-sectarian future. Both in Iraq and Afghanistan, it is important that we build the capability of those Governments in those countries to withstand the terrorists and make sure that democracy succeeds.

David Cameron: We had a candid assessment from the US Defence Secretary; my point is that we want equally candid assessments from the Prime Minister. It looks increasingly likely [ Interruption. ] That is right: we should not just have to hear from other people; we should hear from the Prime Minister. It looks increasingly likely that the Baker-Hamilton report will lead to changes in US policy. Will the Prime Minister tell the House of Commons today what he thinks those changes should be?

Tony Blair: Exactly as I described them last time I spoke to the House, after I gave evidence to the Baker-Hamilton inquiry. They fit into two categories. First, inside Iraq, it is important that we complete the building up of capability, especially that of the Iraqi army. For example, down in the south, the Iraqi army is now capable of taking on security in two out of the four provinces and it is increasingly doing so in Basra. We have to complete that process. We must also ensure that the governance and capability of the Iraqi Government are improved. That relates not only to the way in which the Government function, but to the disbursement of money in both Sunni and Shi'a areas. It is important that we make sure that the process of reconciliation that the Iraqi Prime Minister has outlined is carried through with greater effect than has been the case so far. Secondly, outside Iraq, as I said to the inquiry, and as I have said to the House on many occasions, we have to pursue a policy for the whole middle east, which means in particularand starting withfinding a solution to the Israel-Palestine conflict. That will be absolutely essential if we are to put that region on a more stable footing.

David Cameron: Of course we should discuss the Baker-Hamilton recommendations with our allies and work with them as closely as possible. However, decisions on the future of British troops in Iraq must be taken by the British Government in the British national interest. Does the Prime Minister understand that the British public want to hear a reassurance from him on that vital point?

Tony Blair: Of course we have got to decide this policy on the basis of the British national interest. It has always been my view that it was in the British national interest to remove Saddam Hussein and to stand shoulder to shoulder after 9/11 with our American allies. At the moment, it is important that we complete the mission that we have set for ourselves in the south of the country. Thanks to the work that British troops have been doing, the operation that has been going on bit by bit in Basra to turn over control of security to Iraqi forces has been completed in about half the city. Reconstruction and development projects are going in behind that. I am pleased to say that the process has been relatively successful, and if it is successful, of course it diminishes the need for British troops to patrol in Basra. Our strategy is absolutely clear: to make sure that we build up the Iraqi capability, but to do so in a way that makes it absolutely clear to the people fighting us in Iraq, Afghanistan and elsewhere that we stand on the side of people who support democracy, and that we stand up to terrorists and are prepared to fight them and take them on, wherever they may be.

Ann Clwyd: The Prime Minister will know that I argued for 30 years for the end of the Saddam Hussein regime, which killed so many of my friends. When my right hon. Friend meets President Bush later today, will he make it clear that despite all the setbacks, we will continue to be committed to ending tyranny and upholding justice, whether that is in Iraq, Palestine, or elsewhere in the world?

Tony Blair: I certainly will. I pay tribute to my right hon. Friend's steadfast support of those who favour democracy in Iraq and elsewhere. As she rightly implies, it is important to emphasise that the people whom we are fighting are al-Qaeda linking up with Sunni extremists and Iranian-backed elements linking up with Shi'a militia. Those are the self-same forces that we are fighting in Afghanistan and different parts of the world. As we build up the capability of the Iraqi and Afghan Governments, it is important that we send a very clear signal that our mission is to support those who are in favour of democracy, and that we will continue to do so.

Menzies Campbell: I join the Prime Minister in his expressions of sympathy and condolence. The new American Defence Secretary also said that all options were on the table. Among those options, is there phased withdrawal on the part of British forces?

Tony Blair: Let me explain again to the right hon. and learned Gentleman. It is our strategy to withdraw as the Iraqis become capable of taking on their security. That has been our strategy from the beginning and it remains our strategy nowI assume that he agrees with it.

Menzies Campbell: Let me say this to the Prime Minister: is it not clear that the British Government have no policy of their own in relation to Iraq and that we are wholly dependent on decisions taken in Washington? What sort of strategy, and what sort of legacy, is that?

Tony Blair: It is precisely because we believe in supporting the Iraqi Government, who have asked for our presence in the south of the country to ensure that we protect Iraqi people until the Iraqis have the capability to do so, that we remain in Iraq. As, progressively, the Iraqis become capable of taking on their security, which they are doing in two out of the four provinces and in one half of Basrawe are now completing the mission in the other half of Basrathe need for British troops diminishes. That is our strategy. I say to the right hon. and learned Gentleman that it is very important, especially at this moment when British troops are doing an extraordinary job in the most difficult circumstances, that we make it clear that the people fighting us down in Iraq, as in Afghanistan, are people whom we will take on, fight and defeat anywhere that they are.

Ashok Kumar: Has my right hon. Friend seen early-day motion 140, in my name, which is supported by Members from all parties, regarding the treatment of the Hindu community in Kazakhstan? Only two weeks ago, 60 families were attacked and their homes were destroyed by riot police. Most of them are homeless now, and they face a terrible, cold winter. Will my right hon. Friend talk to his friend the President of Kazakhstan to see what he can do for those victims, who are suffering and whose only crime was to hold the Hindu faith?

Tony Blair: We have made our concerns clear to the Kazakhstan Government. My hon. Friend is absolutely right to say that it is important to make sure, whether in Almaty or anywhere else, that people are free to practise their religious faith. I assure him that we will do all we can, on our own behalf and through the non-governmental organisations with which we are co-operating there, to make sure that Hindus who have been discriminated against in that way are properly protected.

David Cameron: One in five children leaving primary school cannot read properly. Will the Prime Minister confirm that this year the national reading tests results have got worse?

Tony Blair: It is correct that the figure is at 83 per cent., rather than 84 per cent., but let me say to the right hon. Gentleman that that is a huge improvement on the situation that we inherited in 1997. Let me say one other thing that I think will be of interest to the House: although it is correct that, at level 4, overall there is a 1 per cent. fall to 83 per cent., the number of children within that who are now attaining level 5, which is over and above what they are required to achieve, has more than doubled since 1997. I am grateful for the opportunity to point that out. For the first time, in reading and in science, the percentage of children within the cohort getting to level 5 at age 11 is now almost 50 per cent. I agree that we still have a lot more to do, but thanks to investment and reform under this Government, much progress has been made.

David Cameron: Does that not just show the complacency of the Government?  [Interruption.]

Mr. Speaker: Order. Mr. Cameron.

David Cameron: Yesterday, the new head of Ofsted said that the number of 11-year-olds who cannot read was a national disaster. One fifth of school children cannot find Great Britain on the map. The Prime Minister may be spending extra money, but he is not getting the basics right. Now let us turn to secondary school education. Yesterday the Treasury, the home of the clunking fist [Interruption. ] But the Chancellor is not much of a clunking fist; he cannot even get rid of a lame duck. Yesterday the Treasury said that more than one in six young people leave school unable to read, write or add up properly. Given that young people leaving school today have spent almost all their schooling under a Labour Government, does that not show the extent of the failure?

Tony Blair: The right hon. Gentleman was obviously not listening to a word that I said in my initial reply. The fact is that the results are hugely up since 1997; those are the facts. What is more, as I have just indicated, half of those kids who attain the right grades aged 11 are now getting to level 5, and that is a huge improvement since 1997. In addition to that, the number of computers in the classroom has doubled. In addition to that, for those aged 14 the results are up, as they are for those aged 16 and 18. As for what the right hon. Gentleman said about the chairman of Ofsted, she actually said that things had considerably improved over the last few years. I agree entirely that there is a long way to goof course there is. It is not acceptable that any child aged 11 does not achieve the requisite literacy and numeracy, but the situation is a darned sight better than what we had under his party.

David Cameron: What she said was that it was a national disaster. Why not look at the five core subjects, and how children are doing in those? If we look at who is gaining five decent GCSEs in English, maths, science and modern languages, we see that the figures have fallen since 1997. Let us look at school leavers. In spite of the new deal, all the money and all the pre-Budget reports, the number of 16 to 18-year-olds who are not in employment, training or education has gone up by 40 per cent. since the right hon. Gentleman became Prime Minister. Why?

Tony Blair: Because the proportion of children going through the system has risen at the same rate. It is not acceptable or right that any young person should leave school without going on to education or training, but that is the very reason why we have the new deal, which helps young people into a joband which the right hon. Gentleman opposes. That is the very reason why we want to increase investmentbut he has pledged to cut that investment. He talked about five good GCSEs, but whether we take that as five good GCSEs overall or including English and maths, again, the results are hugely up since 1997. We are very happy to debate education policy in this country. Yes, there is still a lot more to do, but it we look back over the last 10 years, results are up, investment is up, schools are getting better, and anyone who goes into any school in any constituency can see the changes and improvements. We are committed to increasing that investment still furtherbut the right hon. Gentleman now has a fiscal rule that would chop that investment by sharing the proceeds with tax cuts. Let us not forget what the system was in 1997, how much improvement there has been in10 years, and what a disaster it would be if the Opposition ever got their hands on it again.

Sandra Osborne: Is the Prime Minister aware that last week, the former employees of Chiltons of Girvan in my constituency were the first to receive payments from the Pension Protection Fund, signifying that thanks to the Labour Government, never again will people be left with next to no pension when their company goes bust? Will he look again at the financial assistance scheme for people who lost their pensions before the fund was introduced, to see whether they can receive the same benefits?

Tony Blair: We certainly keep the provisions under close review, but as my hon. Friend will know, the difficulty is that there is a limit to the amount of money that we can put through the scheme. By pledging hundreds of millions of pounds to help people who have lost their pensions through no fault of their own, the Government have, for the first time in this country, provided at least some support, particularly for older people of working age who are approaching retirement, as they sometimes find that all the money that they have put in over 30 years of service is suddenly lost. I agree that it is important to keep the terms of the scheme under review, but my hon. Friend is right to say that for the first time people receive protection under the Government.

Bernard Jenkin: Can the Prime Minister explain why, under the Chancellor, economic growth has been three times higher in the Republic of Ireland than in our own country?

Tony Blair: I do not know about the comparison with the Republic of Ireland, but let me give the hon. Gentleman a comparison between this Government and the previous Government.  [ Interruption. ] I know that Tories do not want to hear this, but it is more relevant to compare rates of economic growth in this country. Under the Chancellor, we have the strongest economic growth of any comparable country. Interest rates are not 10 per cent., as they were when the hon. Gentleman's party was in power, but average half that figure. We have the lowest inflation and unemployment for decades. Once again, I should like to thank the Conservative party for pointing out our record.

Andrew Dismore: Last week we celebrated the fifth anniversary of free museum admissions, including at the Royal Air Force museum in my constituency, where there has been a 50 per cent. increase in visitors, including people who would never have visited it before. Will my right hon. Friend do all that he can to encourage even more people to visit the RAF museum? Perhaps he would like to visit it himselfand the invitation includes you, too, Mr. Speaker.

Tony Blair: rose

Andrew Dismore: Will he ensure[Hon. Members: Wait!]that they receive the resources that they need to continue that highly successful policy?

Tony Blair: I apologise for interrupting my hon. Friend in mid-flow. I think I am right in saying that there have been around 5 million extra visits to museums since we introduced the policy. Opposition Members may try to disparage it, but it has been a major change which has allowed low income families, particularly youngsters, to gain access to our museums. The fact that millions of people are visiting and using museums is a wonderful thing for our country, and we should be very proud of it.

Edward Vaizey: When the Prime Minister visited the biofuel company Regenatec in my constituency last month, he received a pretty convincing presentation showing that the high level of duty on biofuels is discouraging their use. Given the huge impact that the increased use of biofuels could have on CO2 emissions, has the Prime Minister reflected on that presentation, and has he any proposals or ideas to increase their use?

Tony Blair: The hon. Gentleman will have to wait for the Budget for that. However, the presentation was excellent. In order to encourage biofuels, it is important that we continue, as the Chancellor has been doing over the past few years, to make sure that the system incentivises the use of clean energy. It is important that we recognise that biofuels, particularly engineered as the company suggests, give us the opportunity of reducing CO2 emissions considerably.

Margaret Moran: Is my right hon. Friend aware that we are in the middle of the16 days of action against domestic violence? Women who are repeatedly beaten and repeatedly asked to go to court to achieve an injunction say thank youthank you for the extra 8 million that the Government have given to increase their safety. Will my right hon. Friend do more to increase the safety of survivors of domestic violence by ensuring that Supporting People funds are sufficient to end the refuge postcode lottery, so that survivors have adequate protection when they need it?

Tony Blair: My hon. Friend is right in describing the progress that has been made and the challenge that lies ahead. The remaining provisions of the Domestic Violence, Crime and Victims Act 2004 will be implemented in the middle of next year. We have invested an extra 70 million to tackle domestic violence, and on the latest figures that we have, domestic homicides are down, the number of guilty pleas is up significantly, and convictions at court have quadrupled. One of the reasons why that is happening is that there is far greater co-operation across the agencies, and a far greater willingness in our court system and among the police to take domestic violence far more seriously.

Sammy Wilson: Sixteen years ago the son of my constituents Mr. and Mrs. Smith of Carrickfergus was murdered by a car bomb at Newry checkpoint as he rescued a man who had been strapped into that van by the IRA. The families of those victims were told that the mastermind behind the bomb was a very senior Sinn Fein politician who was also an intelligence source for MI5. The historic inquiries team has now reopened the case. Will the Prime Minister first ascertain whether any intelligence exists as to the mastermind behind that bomb, and secondly, give the House the assurance that no intelligence will be held back to protect a senior politician or an intelligence source?

Tony Blair: I can assure the hon. Gentleman that no information whatever, whether intelligence or otherwise, will be held back from the proper authorities. I obviously cannot comment on the particular case of his constituent, however.

Gordon Marsden: Will the Prime Minister warmly welcome, as I do, the significant report by Lord Leitch yesterday on the skills challenge facing the country? One of the aspects that Lord Leitch highlights is a focus on adult skills, which is significant in constituencies such as mine. Will that be given adequate representation in funding for education over the next five years?

Tony Blair: I can certainly give my hon. Friend that assurance. There has been a massive investment in our school system, with the results that I pointed out earlier. He is right to say that skills are an important part of the challenge that we face. Already we have given hundreds of thousands more peopleover a million more peopleaccess to skills and qualifications, but we need to do far more. About7 million adults in this country still have not attained the right literacy or numeracy grade, so it is important that we go further. Further education colleges will be an important part of that. My hon. Friend may hear something to that effect later.

Peter Luff: The Prime Minister is the only Briton apart from Winston Churchill to have been awarded the US congressional gold medalbut he seems strangely reluctant to go and pick it up. Why does not he do so tomorrow when he is over there meeting members of Congress, before the new Congress changes its mind?

Tony Blair: I am afraid that even at the risk of such an event, I have other things to do in my time in Washington.

Brian H Donohoe: My right hon. Friend will remember the meeting that we had with him in connection with the high cost of energy as regards firms in my constituency. Will he congratulate Caledonian Paper on its announcement yesterday on changing its energy needs? Will he join me in condemning Scottish Power, npower and Powergen on the use of backdating and back-paying customers who use tokens to fulfil their energy needs?

Tony Blair: I know that my hon. Friend has tabled an early-day motion on this subject. Ofgem is engaged in extensive discussions with suppliers as part of the supplier licence review on how to tackle the problem while replacement of meters takes place. I understand that from 1 December British Gas has stopped backdating prices for token users. My hon. Friend makes a fair point. I am sure that a way round this can be found, and I hope that the discussions between Ofgem and suppliers will yield the results that he indicates.

James Duddridge: Does the Prime Minister expect to be interviewed under caution by the police this weekend?

Tony Blair: For very obvious reasons, I have absolutely nothing to say on that subject.

David Borrow: At last night's meeting of the all-party group on AIDS, Martin Narey of Barnardo's explained that 250 children in this country are kept alive by NHS AIDS drugs, and that those children are due to be sent back to their country of origin. Will my right hon. Friend agree to meet a small delegation to find a way of ensuring that the life of every child matters?

Tony Blair: I am certainly happy to meet my hon. Friend and any delegation of his on that subject. In the meantime, I will look into the case and correspond with him.

Lee Scott: Will the Prime Minister give an assurance to my constituents that there will be no cuts at King George or Whipps Cross hospitals?

Tony Blair: First, let me say to the hon. Gentleman that I know that there is a consultation on health provision in his area. I would point out that funding for his primary care trust has increased by some 30 per cent. over the past three years. In his health authority, whereas when we came to power there were 50,000 people waiting for more than 26 weeks, there are now only two. Health care in his constituency has improved in every single aspect. The Conservatives opposed the investment that we put in; they are now opposed to the reform too. His party, above all other parties, has no credibility on this issue at all.

David Anderson: Will the Prime Minister discuss with his Cabinet colleagues how we can help elderly people to pay their heating bills this year, given the unprecedented rise in energy bills? Will he consider having a windfall tax on the companies that have made these profits?

Tony Blair: Of course my hon. Friend will know of the 200 winter fuel allowance300 for those over 80. We will continue to do everything that we can to support the poorest pensioners. I very much hope that the companies that are supplying those pensioners take account of the fact that the elderly, particularly those who are living in poverty, have special and particular needs.

John Barrett: The Prime Minister will know that the Department of Trade and Industry will make a major announcement next week on the future of the Post Office network, including the potential closure of many offices. Why does he prefer to invest millions of pounds in reducing the size of the best retail network in the country to investing in new products and Government services, which would ensure that the post offices would be open next Christmas?

Tony Blair: May I just point out to thehon. Gentleman that we have invested approximately2 billion in post offices in the past few years? For obvious reasonsthe way patterns of behaviour change, especially in respect of pensioners and bank accountspost offices face a challenge. We are sitting down with them and trying to work out the right way forward, but it is unreasonable to say that we have been cutting support for post offices. On the contrary, we have been increasing the investment dramatically, precisely to protect post offices.

James Duddridge: On a point of order, Mr. Speaker.

Mr. Speaker: After the statement.

Pre-Budget Report

Gordon Brown: This is my 10th and latest pre-Budget report and, under this Government, the 10th consecutive year of economic growth.
	I can report not only the longest period of sustained growth in our history, but that, of all the major economiesAmerica, France, Germany and JapanBritain has enjoyed the longest post-war period of continuous and sustained growth.
	The Treasury forecast is that growthsustained under this Government for a record 38 quarterswill continue into its 39th and 40th quarters and beyond. Ten years ago, Britain was seventh out of seven in the G7, bottom of the G7 league for national income per head. In the last two years, Britain has been second only to the United States. In no other decade has Britain's personal wealthup 60 per cent. since 1997grown so fast. The pre-Budget report drives forward the great economic mission of our timeto meet the global challenge and unleash the potential of all British people, so that the British economy out-performs our competitors and delivers security, prosperity and fairness to all.
	Let me report: growth in quarter one of 0.7 per cent.; in quarter two of 0.7 per cent., and in quarter three of 0.7 per cent. The forecast for 2006 was annual growth of between 2 and 2frac12; per cent. I can report that growth this year will surpass that figure and is expected to be 2frac34; per cent., and will rise to between 2frac34; and 3frac14; per cent. next year. Business investment is up 5frac34; per cent., exportsare up 6 per cent. and investment overall is up6 per cent. Despite contending with global imbalances, exchange rate uncertainties, stalled trade talks and high commodity prices, Britain's investment-led and export-led growth is forecast to continue in 2007, and investment and exports are forecast to rise by 5 per cent. or more.
	By mid-2007, we expect inflation to be at its 2 per cent. target and to remain at target in 2008. Britain uniquely continues to combine recession-free growth with the longest perioda decadeof simultaneous employment growth and productivity growth. Productivity, which, in the last economic cycle up to 1997 grew by1.9 per cent., is averaging since 1997 2.4 per cent. From 1997 toand includingthis year, our productivity per worker has moved 3 per cent. ahead of Germany and11 per cent. ahead of Japan. We have halved the gap with France and we are the only G7 country to narrow the gap with the United States.
	As productivity continues to rise, this year alone there are 200,000 more men and women in employment [Interruption.]

Mr. Speaker: Order. It is the done thing to let a Minister make a statement to the House and not to interrupt.

Gordon Brown: In contrast to 3 million unemployed under the previous Government, there are now2frac12; million more jobs in Britain and the highest ever number of men and women in work in our country, and employment is higher since 1997 in every region and nation of the United Kingdom. The Secretary of State for Work and Pensions is today strengthening the new deal, with further measures to bring lone parents and the unemployed into jobs, but there is already a higher proportion of the working-age population in employment in Britain than in America, Japan, Germany, France or the whole euro area.
	I can report also that the number of people with tax-free savings accounts, ISAs, is now exceeding16 million, in contrast to just 9 million under the old system of TESSAs and PEPs, and I can confirm that the tax-free advantages of individual savings accounts will continue beyond 2010 and they will be made permanent.
	In line with independent forecasters, we have decided to maintain trend growth at 2.75 per cent. while basing our public finances, audited by the NAO as cautious and reasonable, on a rate of 2.5 per cent. As I will show when I give all the fiscal figures in detail, Britain will meet both its fiscal rules in this economic cycle and the next. So we build for the future from the fundamentals of a recession-free decade of stability and growth with low inflation, and this is the strongest foundation from which to address the great challenges ahead.
	Let me summarise: Asia is already out-producing Europe. China alone is manufacturing half the world's computers, half the worlds clothes, and more than half the world's digital electronics and, this Christmas, more than 75 per cent. of children's toys. But in the next10 years, the competitive challenge is even more profound. Once responsible for just one eighth of the world's growth, China and India will soon capture almost half. And increasingly they are competing not just on low cost, but on high skills. Every year, Britain adds 75,000 engineers and computer scientists, while India and China add half a million. Annually, Britain turns out a quarter of a million graduates; India and China 4 million. Economies like ours have no choice but to out-innovate and out-perform competitors by the excellence of our science and education, the quality of infrastructure and environment, the flexibility of our economy, and our levels of creativity and entrepreneurship.
	Just as in the last decade, by planning long term, we created a new and enduring British framework for long-term economic stability, the task is to think long term again for the coming decade and to create a new British framework for innovation and investmenta British strategy to make the next stage of globalisation work for the British people.
	A shared finding of each review we have published in the past few days is that the investments that Britain must make can be achieved only in a new era of shared responsibility and of long-term partnerships between the public and private sectors. If the focus of our first decade was to replace or repair old hospitals, old schools and old housingthat is the catch-up investment that we had to dothe new priority is world-leading investments that will move Britain sustainably ahead of our competitors: the road and rail networks, the affordable housing, the advanced medicine and science and the schools and colleges of the future.
	We in Britain now have a long-term choice to makewhether to commit to the essential investments that these reports recommend. First, I shall deal with science and innovation. Twenty-five years ago, the market value of our top companies was no more than the value of their physical assets. Today, the market value of Britain's top companies is five times their physical assets, demonstrating the economic power of knowledge, ideas and innovation. The next challenge for Britain is to match strength in basic research with success all round in transforming knowledge into successful products and new jobs.
	So, having consulted on the way forward for university research in the UK, we are today detailing a new system for assessment and funding. As a first step, universities will have access to 60 million a year directed to applied research with commercial potential. We are determined that Britain should be a world-class location for future medical research, including stem cells. To ensure that Britain leads the world in developing new treatments and drugs, we will bring together the research capability of our universities, institutes and pharmaceutical companies with the unique resources of the research facilities of the NHS. I can confirm that, with a pooled budget of over1 billion a year and a new fast-track procedure for priority research, the president of the Academy of Medical Sciences, Professor John Bell, will lead this new drive to identify for Britain the most useful and fruitful areas for potential medical breakthroughs.
	British science can also do more to eradicate poverty and disease around the world, so today the International Development Secretary is establishing a new partnership with the research councils and charities, including the Wellcome Trust and the Gates Foundation, so that we can maximise the contribution of British inventors, scientists and researchers to the urgent global task of attacking poverty.
	Because the future success of our creative and knowledge-based industries also depends on Britain having a robust intellectual property regime, the Secretary of State for Trade and Industry is announcing today that he will tighten the penalties for copying and piracy while giving individuals new rights for personal use, and he will introduce a new fast-track protection for small companies to safeguard their trademarks.
	Since 1997, the number of films made in Britain has increased by 50 per cent. To encourage an even more vibrant British film industry, I am confirming that 1 January will be the date to introduce new film tax reliefs. I am also addressing avoidance and the rules governing managed service companies.
	The best way to make globalisation work for the British people is to combine open markets, free trade and flexibility with investment in people and fairness to people. The minimum wage is now 5.35 per hour, but to be effective we must ensure that British workers and good British companies are not undercut by illegal rates. In January, we will raise the penalties for persistent illegality, and to raise the standards of enforcement I am announcing a 50 per cent. increase to 9 million in the budget to monitor and police the minimum wage.
	In the past 10 years, over 1 million more adults have gained literacy and numeracy qualifications, and the British work force now has 3 million more men and women with skills. The Leitch report says that instead of today's 6 million unskilled workers, the 2020 economy will need only half a million unskilled workers. Instead of 9 million high-skilled workers and graduates today, we will need 14 million.
	I want British workers to gain the skills for those higher-paid jobs of the future. Our aim is that by 2020: 90 per cent of adults reach at least the equivalent of5 GCSEs, achieving in just over one decade what no other country has managed until now; that by reforming underperforming colleges we will double from 2 million to 4 million the number of adults achieving A-level equivalent skills; and that we ensure that our economy has 5 million more men and women with high-level professional and graduate skills.
	Our objectives cannot be achieved either by Government alone or by business alone. So the review assesses that, after 2010, a new statutory entitlement to skills training may be required. But there is an urgent need to make progress now and by consensus, so the Secretary of State for Education and Skills is today appointing the former director general of the CBI,Sir Digby Jones, to advance an agenda of employees taking more responsibility to train; employers taking more responsibility to offer time off, with, in return, more say over what training is provided; and the Government taking more responsibility to reform and invest in training provision at work, in colleges and online.
	To meet the skills needs of the future, we must also encourage young people, who too often lose out, to stay on and study for qualifications and go to university and college. Around education maintenance allowances, we are introducing an earn-to-learn programme for people to gain graduate qualifications while still working part-time; new summer school universities; work experience and coaching to motivate young people to stay on in education after 16; and an extension of the support to 16 and 17-year-olds who are not in education or employment, to help them into training and then into work. We will consult on 2,000 bursaries for looked-after children to encourage them to go to university. We will also consult on a new path for entry to university, in which students volunteer in return for a reduction in tuition fees.
	To ensure that every child and young person has the best start in life [Interruption.] I thought that there was common cause on this. We must address the causes and roots of child poverty. In April, child benefits paid to the poorest child, which were only 28 a week in 1997, will rise to 64 a week. These tax credits are the main vehicle that has ensured that, since 1997, 2 million children have been taken out of absolute poverty and almost 1 million children out of relative poverty. Now that the healthy start scheme offers half a million pregnant mothers and families with young children up to 5.60 a week extra for nutrition, it is time to do more.
	I have received powerful representations that in the last months of pregnancy, when nutrition is most important, and in the first weeks after birth, the extra costs borne by parents could be better recognised if we did more to help through the universal benefitchild benefitwhich is paid to all. Maternity grants are available to low-income mothers from the 29th week of pregnancy. Help should be available to all mothers expecting a child, so child benefit will be paid on that basis to every motheradditional child benefit that now recognises the important role, at this critical moment, that child benefit can play.
	We are also publishing today the interim report of the third-sector review and an action plan for third-sector involvement in public services. We propose more stability in funding for the third sector, the voluntary community and charitable organisations upon which so many communities depend, particularly small local organisations. I can announce that in the spending review the norm will not be one-year funding for third-sector organisations, but offering them three-year funding.
	Community ownership of assets can provide local communities with a financial and social stake in their own areas, so we are also announcing a 30 million fund to encourage local authorities and the third sector to work together to expand community ownership of community assets. Reviews on children and disability, issues of social care and local regeneration will report next year. With 100,000 Olympic volunteers already, my right hon. Friend the Secretary of State for Culture, Media and Sport and my hon. Friend the Parliamentary Secretary, Cabinet Officethe Minister responsible for the third sectorwill now consult on the next stage: how young people can do more to volunteer in the run-up to the 2012 Olympics.
	The same partnership of responsible individuals, companies and Governments is vital to meeting the environmental challenge. I have said that we should use market mechanisms and incentives to work towards global carbon trading. Since the Stern review, I can report that 31 countries in the European Union and the European Free Trade Association have now signed up to emissions trading as a first step towards that global framework, and we are bringing together the major financial institutions because our aim is to make London the world's leading centre for carbon trading.
	On the development of biofuels, Britain has now signed a partnership agreement with Brazil, Mozambique and South Africa. On the preservation of rain forests, we are working with Latin American and Asian countries. On clean coal, we are working with China and India. Today, Norway and Britain are together launching the first feasibility study for a new infrastructure for carbon capture and storage under the North sea. My right hon. Friend the Secretary of State for Trade and Industry will be appointing engineers ahead of a decision to be made next year on the first carbon capture demonstration plan for the United Kingdom.
	It is time, also, to set a long-term framework for curbing the carbon emissions from houses, which constitute 30 per cent. of all emissions. Next week my right hon. Friend the Secretary of State for Communities and Local Government and my hon. Friend the Minister for Housing and Planning will set out plans to ensure that within 10 years every new home will be a zero-carbon home, and we will be the first country ever to make that commitment. To accelerate the building of zero-carbon homes, for a time-limited period the vast majority of new zero-carbon homes will be exempted from stamp duty. For existing homes, I will consult on a new facility to undertake energy audits and offer low loans that would in time, because of low energy bills, pay for themselves.
	Through greater energy efficiency, our aim is to reduce emissions and to eliminate fuel poverty. In addition to the basic pension rising from next April by 3.6 per cent. and the winter allowance of 200300 for the over-80sthe pension credit minimum guarantee will rise by 5 a week for a single person and 7.65 a week for couples. With grants of 300 to 4,000through the Warm Front programme, which I extended last yearwe are providing not only insulation, but free central heating for low-income pensioners and extra support towards central heating in all other pensioner households. By the end of 2008, we will have insulated an additional2.7 million homes, but in the coming year we will extend Warm Front and, community by community, we will make it possible for 300,000 pensioner and other households, the ones most vulnerable to fuel poverty, to have free insulation and free central heating.
	I turn to the framework for transport, which is responsible for 30 per cent. of all carbon emissions, the aviation sector accounting for a fifth of those. Currently, aircraft emissions are not part of the EU emissions trading scheme, and nor is aviation fuel taxed. While we continue to work internationally to seek a global agreement on reducing aircraft emissions, each country must take action domestically. From1 February, we will double air passenger duty. For most journeysover 75 per cent. of themduty will rise from 5 to 10, securing extra resources in the coming spending round for our priorities, such as public transport and the environment.
	A priority for vehiclesresponsible for 25 per cent. of emissionsis to promote cleaner fuels through fiscal incentives. Today, I am extending the 20p per litre discount to include the next generation of biodiesel, and we will offer that discount to all new innovative fuels as they develop. I am also consulting, prior to a Budget decision, on extending the current 40p per litre duty discount for biogas and on the level of tax discounts for company cars that use high-blend biofuels. I am relieving small biofuel producers of requirements to register or submit returns. While I will go ahead with an inflation rise in fuel duty from midnight tonight of 1.25p per litre, I will not restore the fuel duty escalator and I have rejected a real terms increase in fuel duty. I can also announce that, to incentivise the use of cleaner fuels in trains in the same way as we do for cars, the tax rate for piloting rebated fuels mixed with biofuels will be reduced from 53p to 8p. For greater energy efficiency in public procurement, we are publishing new guidelines to ensure that the 125 billion we invest each year is spent both well and in a sustainable way, and as a first step we will pilot school designs that achieve a level of excellence in carbon reduction.
	Tackling climate change is an opportunity for Britain to create thousands of new jobs. Our new institute to investigate new environmental technologies will start with a budget of 550 million, and I can also confirm that there will be a second enterprise capital fund focused on innovative green technologies. The theme of both the Eddington review on transport and the Barker review on planning is that we must systematically modernise and improve Britain's road, rail, housing and civic infrastructure, which was run down in the '70s, '80s and early '90s. We must invest in a sustainable infrastructure that will contribute to the future prosperity of the country.
	Just as we made monetary policy independent of Governmentthen financial services policy, and then competition policy and much of industry policyit is time to adopt the same approach for planning. We will now consult on the proposal that in future, while Ministers will set policy guidelines, strategic decisions on location and planning permission for major infrastructure projects will be made outside of day-to-day political control and instead by an independent planning body.
	As we move forward our risk-based approach to local and national regulation, we are setting new incentives that will cut the numbers of local authority inspections. After consultation with, and support from, business, we will now implement a new approach offering early rulings on business tax, time limits for decisions by the Inland Revenue and a better approach to managing risk.
	As we consult on, and then implement, the Barker and Eddington recommendations, we are today also designating new brownfield sites that will raise the number of new homes on surplus land to 130,000, and we are doubling within four years to 160,000 the number of families who will be able to become homeowners for the first time through shared equity under our investments.
	Properly equipping ourselves for the economic and social challenges ahead requires a long-term commitment of new investment supporting reform and modernisation. Our capacity to finance that modernisation depends on the strength of our fiscal position, on our ability to release resources for priorities, and on the choices we as a country are prepared to make. On the fiscal position, I am today publishing a document on Britain's long-term public finances. Its detail shows that even after taking into account our new commitments on pensions, the country's public finances are on a sound and sustainable basis for the long term, and they are stronger than other countries.
	Before I give this year's fiscal figures, I can confirm that to fund operations in Afghanistan, Iraq and other international obligations, the Secretary of State for Defence has been allocated an additional 600 million, and I want to pay tribute to our armed forces and security services for their contribution to the country. I can also announce an additional 84 million directed to intelligence and counter-terrorism. Our budget for security, which was just 1 billion in 2001, will now be more than 2 billion for 2007-08.
	Our two fiscal rules for the economic cycle are the golden rule that current spending is paid for by tax revenues, and the sustainable investment rule that with debt at a prudent level we can invest in education, the NHS, infrastructure and other essential priorities. Those rules are demanding, and no other major economyneither America, nor Japan, nor the euro areacurrently meets them. However, I can report that, even after the new commitments I am announcing in this report, our current deficit falls from 15 billion to 8 billion and then to 1 billion, and then we record a surplus in successive years to 2011 of 4 billion,7 billion, 10 billion and 14 billion.
	Therefore, with an overall surplus in this economic cycle of 8 billion, we meet the golden rule and are already on course to meet it in the next cycle. Let us compare that with the two economic cycles under the previous Government. In their first economic cycle the rule was missed by a margin of 140 billion, and in the cycle of 1986-97 they missed it by 240 billion. The strength of our fiscal position is that over the economic cycle, and for the first time for four decades no borrowing is necessary to cover current spending.
	I now turn to our second rule, the sustainable investment rule. It is a rule that has been especially challenging for Britain because we have had to catch up after decades of underinvestment in our infrastructure. However, even after doubling capital investment in education, transport and the NHS, we meet our second rule. Debt is 47 per cent. of national income in America; it is 55 per cent. in the euro area; it is 65 per cent. in the European Union as a whole; and it is 90 per cent. in Japanbut it is 37.5 per cent. in the UK. Net debt levels will in future years be 38.2 per cent. and38.6 per cent., and then 38.7 per cent. and 38.5 per cent. Total net borrowing, which under the last Government went as high as 7.8 per cent of gross domestic productthe equivalent today of 100 billion of borrowingwill fall from 37 billion this year to 31 billion, 27 billion, and then in successive years to 26 billion, 24 billion and 22 billion. So borrowing will fall from 2.3 per cent. of national income next year to 1.3 per cent. by 2011. With overall deficits and debt lower than those of our competitors and lower than in recent decades, Britain is meeting both of our fiscal rules in this cycle and the next. Within that strong and sustainable fiscal position, we are well placed to make decisions and to meet our long-term priorities for public services and for investment.
	To do so and to get the most resources to the front line, I am requiring every Department to re-examine each of their assets; granting new powers to the Office of Government Commerce, including tighter rules on fees; removing old financial barriers to the disposal of surplus Government assets; and, based on a register to be published in January, we will also identify additional assets that can be sold. Already, share sales including Westinghouse and other assetswill raise this year and next an additional 7 billion, and over the spending review periods we will raise a further 30 billion from sales of land and buildings.
	Following the Varney report, we can release400 million by cutting Government call centre operating costs by 25 per cent. to free-up resources for the front line. I can also confirm real term reductions of 5 per cent. a year in the budgets of Her Majesty's Revenue and Customs, the Department for Workand Pensions, the Cabinet Office and the Treasury,and of 3frac12; per cent. a year in the Department for Constitutional Affairs. I can announce that for the years to 2011 I have reached agreement with Secretaries of State for net efficiency savings in their overall budgets of 3 per cent. a year and for cuts in their administration budgets of 5 per cent. a year. Taken together with other measures, that releases an additional 26 billion by 2011 for our priorities such as education, the NHS, policing and security.
	As recently as the mid-1990s, 75 per cent. of all new public spending went to debt interest and social security benefits, mainly to pay for unemployment. Today, it is down to less than 20 per cent., and the purpose of all these savings is to ensure that front-line services will have the resources that they need. So, up against the global challenge, and with fiscal rules that allow us to borrow for sustainable investment, we should not postpone, nor should we avoid, essential new investments that this country must make in infrastructure and education.
	One choice for Britain would be to adopt a balanced budget policy, but to achieve that by cutting back on essential investment in schools and infrastructure would in my view weaken us for the global challenges ahead. I have also considered representations for a third fiscal rule, but that would require us to cut spending by28 billion this year alone. That is a choice for Britain that I reject, because[Hon. Members: Hear, hear.] It would deny us investment in education, health, infrastructure and vital priorities, and leave Britain ill-prepared and ill-equipped for the future.
	Instead, I can confirm that capital investment in education, which was only 1.5 billion in 1997, will be 8.3 billion next year, and we will set out long-term plans for investment to rise even further. I can also confirm that investment in transport, just 4 billion in 1997, will be 9.6 billion next year, and in the spending review we will set out an updated 10-year spending plan. Investment in housing, just 2 billion in 1997,will be nearly 8 billion next year, with sustained investment through into the next spending round.
	I can also announce that the spending review for the years to 2011 will be based on planned capital investment in our country in infrastructure, education and vital priorities, rising from 39 billion last year to 60 billion in 2011. Let me give details of the investment that we will make over the five years ahead: next year,48 billion, rising in 2008 to 51 billion, then to54 billion, then to 57 billion and then to 60 billion, showing our commitment to modern roads and rail, to modern schools and science, and to new housing, hospitals and the renewal of communities. That is a change from the age of disinvestment under the previous Government.
	The single most important investment that we can make is in education, and today I can start implementing the recommendations that have been put to us on skills. In 1997, there were 80,000 apprentices; today, in England alone there are 250,000, half of whom are now in manufacturing, construction and technology. I can announce that in the years to 2020, the number of apprenticeships will rise to 500,000. I can also announce that under the Train to Gain programme, we will increase the number of adults learning basic workplace skills from 100,000 this year to 350,000 a year by 2011, giving adults, as well as young people, the opportunity to better themselves.
	It is even more important that the next generation do not lose out or fall behind on the basic skills that they will need to succeed in the global economy. So the Secretary of State for Education and Skills is also announcing today that the Every Child a Reader programme, which already has the best results in literacy, will be extended nationwide year by year. All boys and girls who are already, at the age of six, falling behind in reading will be offered special catch-up tuition. In secondary schools, where the learning gap between boys and girls is greatest, there will be new funds for extra support for mentoring, small group tutoring and personalised learning.
	Since 2001, all children at the ages of one, two and three have received books to encourage them to read. I can announce today that all children starting primary school at five, and as they move to secondary school at 11, will receive books free of charge. In total, 3 million books will go direct to children to lift the reading standards of young people in our country.
	I have also become convinced that, for Britain to rise to the global challenge, we should commit now to year-by-year improvements in investments in schools and educational establishments. It is right that we now make a spending settlement right through to 2011 that covers all capital investment in education. Separate announcements will be made for Scotland, Wales and Northern Ireland. To ensure that all 21,000 schools and educational institutions are fit for 21st-century challenges, I can announce that educational investment in our schools, colleges and university buildings and facilities, which stood at just 1.5 billion in 1997, will by 2010 be 10.2 billion for education alone. The investments in education that we will make are8.3 billion next year, 8.6 billion in 2008, and9 billion in 2009, rising to 10 billion in 2010. In the next four years, that is a cumulative investment in education alone of 36 billion, matching by 2010 state school capital investment per pupil to private schools, as year by year we close the gap.
	Our goal is 12,000 new or completely refurbished schoolshalf of all primary schools and 90 per cent. of all secondary schoolsbenefiting 4 million children a year; in addition, 100 colleges rebuilt, serving 1 million students; and in total, 3,500 new children's centres, built for nearly 3 million boys and girls in every constituency of the country. Every one of our constituencies is benefiting from the biggest programme of educational investment ever, in support of our decision to prepare for the global economy as the most educated nation in the world.
	For next year, I can go beyond the announcement that I made in the Budget on spending per pupil. In striking the right balance between tax, spending and borrowing, I am able to meet both our fiscal rules and to release additional resources for the coming year. I propose to increase the cash that we give to every school and every head teacher, to be used in the way that local schools think best. The typical primary school received 39,000 this year in direct payments. For April next year, I propose that that be 50,000 for every primary school. The typical secondary school received 150,000. For April next year, I propose that it be 200,000. That is the equivalent of 200 for every pupil, paid three months from now direct to the schoolmoney I could use for tax cuts, but I say, invest in education first; money that could not be invested if we had a third fiscal rule.
	Stability is our foundation, education our No. 1 priorityeducation first now and into the future. I commend this statement to the House.

George Osborne: The Chancellor was being modest when he said that this was simply his latest PBR. It is surely his lastunless, of course, the Home Secretary keeps him in his job next year.
	What this country needed was a report that prepares our economy for a future that is more competitive, more flexible and more global than ever before, but that is not what we got today. With this PBR, like the nine PBRs before it, Britain is moving further away from the direction in which we need to go. The Chancellor talked about growth. What he did not tell us is that the growth that he announced puts Britain 21st out of the 25 members of the European Union.  [Interruption.] He denied it today and he shakes his head, but it is confirmed by the European Commission.  [Interruption.] Will he also confirm what is buried on page

Mr. Speaker: Order. The hon. Gentleman should be heard. There should be no private conversations.

George Osborne: Will the Chancellor also confirm what is buried on page 198 of the report just publishedthat he has downgraded his growth forecast for 2008? He did not mention that.
	The Chancellor talked about sound public finances, but he downgraded his borrowing forecast again. Will he confirm that that means that Britain is set to have the largest structural deficit of any major European economy next yearas he himself might once have put it, larger than Germany, larger than France, larger than Spain and larger even than Italy? Will he confirm that he has just revised upwards his net debt figures for this year? By 2010, they will be 4 billion higher. He did not mention that in his statement, but will he confirm that when he replies?
	How on earth could the Chancellor have given a report on the state of the economy without mentioning that Britain has just recorded the largest rise in unemployment in the developed world? He is so obsessed about securing his next job that he has forgotten about the 300,000 people who have lost their jobs.
	How could the Chancellor possibly have the nerve to speak for 40 minutes without addressing the crisis in the NHS? He had no new answers today. He promised a change of gear, but as usual all we got was more of the same. His speech was full of rhetoric about the long term, but he did not address the central, long-term economic question that we face: why, according to every international measure and league table, is Britain becoming less competitive?
	Does the right hon. Gentleman remember saying when he first became Chancellor that the first challenge was to increase our productivity? It remains the first challenge today. Productivity was 2.6 per cent. when he entered the Treasury, and is just 1.5 per cent. ashe leaves. Measured against what he calls his fundamental yardstick, has he not fundamentally failed?
	What is the Chancellor's answer? Like every central planner in history, he hides behind a relentless production of reports. There have been 70 in total, and never have so many poor trees died in vain. However, a glimpse of the truth can sometimes slip past the Treasury censors. Sir Rod Eddington jetted in from Australia to tell us what we already knewthat the UK transport network is stretched beyond capacity. The Leitch report says that the Chancellor's skills policies have led to complexity, duplication and bureaucracy, and that it is no wonder that the UK has
	a large and significant basic skills problem.
	Today, the Chancellor promised action for 16-year-olds, yet one 16-year-old in six cannot read, write or add up properly. They are the very children who have been educated almost entirely under a Labour Government, and they have already been failed by the Chancellor.
	The Chancellor's second challenge today was to sort out the public finances. We all know that he is a man in a hurry, but he read out his borrowing figures so quickly that people might have missed them, so I shall read them out again. Over the next six years, theright hon. Gentleman says that borrowing will be37 billion, 31 billion, 27 billion, 26 billion,24 billion and 22 billion. That is higher in every year than he forecast in the Budget last spring. By the way, the current Budget deficit has increased this year. Not only that, he said in the spring that we would be in surplus next year, yet today he confirmed that we will again be in deficit.
	All that borrowing comes despite the biggest tax increase in our peacetime history. Let us be absolutely clear that that means that each family will pay 9,000 extra tax each year. In a world where our competitors are simplifying and reducing business taxes, the UK is almost alone in increasing ours. Where is the long-term sense in that? Where is the sense in landing us with the most complicated tax code in the developed world?
	The Chancellor often responds by citing last year's inward investment figures. That is a typical example of the systematic distortion of statistics that we have come to expect from him, as more than half of our annual inward investment50 billioncomes from one company, Shell, which features in the figures only because it moved its headquarters from Britain to Holland. Does not that say everything that we need to know about this Chancellor's spin?
	The third great challenge that we face is climate change. People say that the Chancellor has become green only recently, but that is most unfair. He has been green ever since that meal at Granita. The Prime Minister remembers that and, although he does not live in Islington any more, it says something about the state of the Labour party that the restaurant is now called Desperados.
	This week, Friends of the Earth said that the Chancellor's record on climate change had been woefully inadequate. Will he confirm that carbon emissions are higher than when he took office and that the share of taxes collected by green taxes has fallen? Today's increase in air passenger duty should have replaced other taxes and not added to them. It proves that the right hon. Gentleman is more interested in raising taxes than in cutting pollution.
	The fourth challenge is to spend public money wisely. The Chancellor once pledged to rise to that challenge. Does he remember saying when he was shadow Chancellor that he wanted to be remembered as a wise spender, not a big spender? His political obituary will say many things, but not that: he has spent 4,000 billion, and now he pledges more spending on education[Hon. Members: Hear, hear.] The lemmings on the Labour Benches do not know that that was the third time that he has reannounced his extra capital spending on schools. When he first made the promise in the Budget, the Institute of Fiscal Studies dismissed it as a highly misleading presentational deviceeconomist speak for spin. Will the Chancellor confirm, after all the rhetoric, that the rate of capital spending growth is set to fall?
	The Chancellor's greatest mistake is that he has spent without reform. The Organisation for Economic Co-operation and Development has said that, despite the extra money, NHS mortality rates are declining no faster than before. By the way, the extra 1 million for medical research was first announced last year. The Select Committee on Education and Skills says that school standards are not improving as fast as they were. People up and down the country who are struggling to find a decent school place or campaigning to keep their local hospital open or sitting in traffic on congested roads are entitled to ask: where has all the money gone?
	The Chancellor is trying to persuade the public that he is the change that they are crying out for. He lets it be known with nods and winks that he will end the spin and eye-catching initiatives of the Blair years, but let there be no mistake: they were his years too; the Blair-Brown years were the years of the clunking fist. The hospital cuts are the Chancellor's cuts, the failing schools are his failures, and the pensions that were destroyed were destroyed by him. The truth is that Labour can be new only once. If the public want change, they will have to vote for it.
	Let us see whether the Chancellor can really break with his past and be different from the Prime Minister. I have four straight questions, to which I hope he will give four straight answers. First, will the Chancellor confirm what the European Commission has saidthat this year Britain has grown more slowly than 21 of the 25 EU member states? Secondly, will he acknowledge that in the past year our country has recorded the largest rise in unemployment in the developed world? Thirdly, does he accept that Britain is set to have the largest structural deficit of any major European economy? Fourthly, will he admit that, in an age of prosperity, real living standards in Britain are now falling?
	Those are four simple questions, so let us see whether the Chancellor can give us four straight answers. Let us see whether the clunking fist can change.

Gordon Brown: Is it not remarkable that the shadow Chancellor cannot bring himself to acknowledge the longest period of economic growth, with the lowest inflation, interest rates and unemployment, that we have ever had? Why does he not say to his Back Benchers the same things that he says when he goes to the City? There, he talks of Labour's macroeconomic success and economic credibility. He speaks of Labour's ability to manage the economy, and says that Labour is the party of economic competence.
	I remind the shadow Chancellor that there were3 million unemployed under the Conservative Government. Unemployment is below 1 million under Labour andas he wants international comparisonsthat is half that in France, half that in Germany, and below the EU average. He said that Britain's economic growth is down. In fact, growth here is higher than in the euro area, so how can he say that it is lower than in Europe?
	Then the hon. Gentleman says that there is a structural deficit. I have just explained to him that we are meeting our fiscal rules. He says that productivity is lower. Productivity has risen, on average, by 2.4 per cent., compared to 1.9 per cent. under the Conservatives. The only two years when productivity fell were Conservative years; and in 30 years the only two years when manufacturing productivity fell were under a Conservative Government.
	As for greenhouse gases and emissions, our economy has grown by 28 per cent. and greenhouse gases have fallen by 9 per cent. We are the country that is meeting the Kyoto targetsno thanks to what happened under a Conservative Government.
	The hon. Gentleman's party is promising to spend more, with every spending Minister offering more spending. Today, he promises that he wants to cut taxes. Then he says that borrowing is too high so he wants to cut borrowing. When will he wake up to the fact that to cut taxes, raise spending, cut borrowing and have a fiscal rule that requires him to cut spending of 28 billion is exactly the position that the right hon. Member for Witney (Mr. Cameron) was in when he was economic adviser to Lord Lamont? That is exactly what led to the tragedy of 1992 when we ended up with 22 tax rises, 100 billion of borrowing, 15 per cent. interest rates, mortgage repossessions and negative equity. We will never return to that.

Vincent Cable: May I start with the bits of the statement I agree with? I am glad that the Chancellor has listened to at least some ofthe advice from the Liberal Democrats about environmental taxation. He has not listened to all of it, because revenue will not be returned in tax cuts for the lower paid, but at least there is something.
	The Chancellor may not have noticed that the Stern commission report recommended that tough preventive action was needed, amounting to something of the order of 1 per cent. of gross domestic product. The tax changes he announced today amount to about one tenth of 1 per cent. of GDP. Where will the other nine tenths come from? The Chancellor's environmental credentials are not helped by publishing in parallel the Barker report, which is really a property developers' charter, and the Eddington report, which makes an unashamed plea for the expansion of airports.
	As the Member who introduced the most recent piece of legislation outlawing copyright theft, I welcome the Chancellor's recognition of the creative industries. That is a major step forward. He is also right to put such emphasis on the long-term challenges from international competition and on creating a knowledge-based economy. However, one question troubles many of us. After all the billions that have been spent on science and on education, why has the number of British young people studying at A-level and equivalent the core disciplines of maths, science and modern languagesthe foundations of a globalising economyfallen since 1997 in both relative and absolute terms? Why are the fundamentals not being got right?
	I turn to the basic theme of the Chancellor's statement. Of course, he has earned much credibility over the years from the fact that the British economy is stable and performing well. He would have earned more credibility today if he had acknowledged some of the problems that his successor will inherit.
	I start with personal debt. Two million people are in extreme debt. According to the Bank of England, one in six people has severe debt problems. The number of mortgage possession orders going through the courts is now 100,000 a year. The level of debt service in relation to income is close to the rate when the last Tory boom burst. My question is simple: who is responsible? Is it the responsibility of borrowers? Is it the responsibility of lenders? Has the Bank of England not done enough? Is it adequate for the Chancellor to be a passive spectator or does he have a role in these matters?
	The Budget numbers are impressive on the surface. The Chancellor has produced some impressive numbers for Gershon savings, but why should we believe them? Until he accepts that his numbers have to be fully independently auditedboth the assumptions and the outcomeshe will be treated as the clever schoolboy who always gets 10 out of 10 in his tests because he marks them himself. Why does he not take advantage of his good initiative in partially increasing the independence of the statistical service to establish a fully independent system of fiscal policy monitoring?
	The Chancellor presented the Budget numbers reassuringly, but he knows perfectly well that if capital investment is to grow, current spending, especially public sector pay, must be dealt with severely in the years ahead. He has taken on board some big, expensive, open-ended public sector spending commitments: the continuing Iraq war; big defence procurement contracts, such as Eurofighter and Trident; new nuclear power; Ken Livingstone's Olympics; and ID cards. In that constrained environment, how can he guarantee that key public sector spending commitments, such as pensions, policing and hospitals, will be sustained?
	I finish with a question that I put to the Deputy Prime Minister last week and which I think bewildered him. I am sure that the Chancellor will always want to be remembered not just for economic prudence but for a progressive record in advancing social justice, so can he answer the following simple question? After 10 years of Labour Government, why is income inequality as bad as when the Conservatives left power and why is wealth inequalityin assetsactually worse than it was then?

Gordon Brown: I shall deal individually with the points that the hon. Gentleman raised. On debt and household income, he has been a persistent critic both of the Bank of England and the Government, butthe figure for debt in relation to incomethe debt repayments people have to makewas of the order of 15 per cent. in the 1990s; it is about 8 per cent. now. Of course, individuals have difficult problems that need to be dealt with; we need proper protection and advice for those people, but the hon. Gentleman must not compare a situation in the 1990s, when interest rates were 15 per cent. and people faced mortgage repossessions, with the situation now when interest rates are 5 per cent.  [Interruption.] Interest rates were above 10 per cent. for four years. I do not think that the Conservatives should keep raising that issue in case I read out the mortgage rates that people had to pay in the early 1990s. The hon. Member for Twickenham (Dr. Cable) will agree that we must do more to help people who fall into debt. We continue to look at what more we can do.
	The hon. Gentleman put a direct question about Gershon. Of the Gershon numbers, 45,000 jobs in the civil service have gone, so it is not a question of something that is about to happenit is happening now. It is part of our desire to drive forward efficiency and get resources to the front line, which I believe we are succeeding in doing.
	The hon. Gentleman asked about poverty and inequality. Of course, in this global economy, they are huge issues, some of which a national Government can affect, but some of whichthese daysa national Government cannot affect. I think he will agree, however, that to have taken 2 million children out of absolute poverty and 1 million children out of relative poverty is a major achievement, given that child poverty trebled in the years of the Conservative Government to more than 4 million. As I announced today, we will continue with additional measures to take people out of poverty.
	The hon. Gentleman's points to me about prudence pale into insignificance when I look at his policies. He is promising to cut taxes and to raise spending[Hon. Members: No.] Every day I read a Liberal press release that promises an additional increase in spending. The hon. Gentleman now says that he wants to cut borrowing [Interruption.] Behind him, someone is saying that he has a fiscal rule equivalent to that of the Conservatives. The only difference between the hon. Gentleman and the Conservatives is that he has at least admitted that he has to raise 20 billion from environmental taxes. He has at least put the figure out in the public arena, although I have to tell him that he would have to raise the price of petrol by 18p a litre and I do not think that the Liberals would be elected in any constituency on that platform.

John McFall: Last year, the Treasury Committee advised the Chancellor to double air passenger duties, so I am delighted to see that he has taken that advice and that aviation is playing its part in environmentally responsible policies. However, behind the pre-Budget report is the issue of globalisation, which is indeed daunting. Given that current trends up to 2020 indicate that 6 million people will still be lacking everyday numeracy skills and 4 million will be lacking everyday literacy skills, is it not the case that initiatives are required in the employment sector? We have seen it in the USA and it is starting to happen here that unskilled workers' incomes are falling behind. Will the Chancellor work with employers and trade unions to ensure that we do not end up with a two-tier work force in futuresome with rising wages and prosperity and the unskilled on stagnant wages living in comparative poverty?

Gordon Brown: The Leitch report alludes to that when it says that because of globalisation, there are 6 million unskilled workers in our economy today, but because most of the traded goods sector can find unskilled workers in other continents, we will need only 500,000 in 2020. We have a stark choice. We have to ensure that people today who do not have the skills, get them for the future. I would have thought that there would be all-party consensus on what to do to achieve that. Britain is in a race with other countries to ensure that we can successfully work globalisation to our advantage.

Graham Stuart: Ten years.

Gordon Brown: The hon. Gentleman shouts 10 years, but in the last 10 years a million more people have acquired adult and literacy skills and 3 million more people in the work force are skilled. That is what we need to do to ensure that we are best equipped for globalisation. I hope that we will see all-party supportwhen the Opposition get a policy that adds up, they may be prepared to support usfor a strategy of upskilling our work force right across the board. We are prepared to make the commitment to invest to do so. I look forward to coming before the Treasury Committee to debate those very issues.

Kenneth Clarke: Does the Chancellor accept that, although it is true that he has not destroyed the record of growth, stability and low inflation that he inherited in 1997, he is only extending our record-breaking period of growth and stability on a sea of mounting public debt and consumer debt, to which the hon. Member for Twickenham (Dr. Cable) has already referred? If the Chancellor's successor believes the extravagantly optimistic descriptions of the public finances that the right hon. Gentleman has just given, he will make serious policy errors. Does the Chancellor accept that his fiscal rules are now lost in a maze of creative accounting and absurd assumptions about the date of the cycle? Even in his pre-Budget reports, every year he has to raise more tax from soft political targets, such as the oil industry last year or transport through green taxes this year. Does he accept that his legacy to his successor will be the toughest public spending round that we have seen for a very long time, in which his successor will have to keep public spending below the growth of the economy as a whole for the foreseeable future? Judging from the Chancellor's rhetoric, he will apparently give him no support in principle at all from his position as Prime Minister.

Gordon Brown: I always like interventions from the former Chancellor and I am grateful to him for attending today's statement. However, his central point was that debt is higher under us than under him. Debt stood at 44 per cent. of national income when he left office and it is 37 per cent. and below today. He should be congratulating us on our achievement. What if I had taken the advice of the former Chancellor at any point during the last 10 years? In 1998, he was predicting a recession and he opposed giving independence to the Bank of England. In his column on 21 June 1998, he wrote:
	I have been forecasting doom and gloom for the British economy in my column in the Financial Mail for most of the past year.
	That was the first of 10 years of stable growth in our economy.

Andrew Smith: I congratulate my right hon. Friend on his statement. My constituents will particularly welcome his commitments on science, education and skills as the keys to living standards and quality of life in the future. In carrying forward the recommendations of Lord Leitch's excellent report, what incentives and measures is the Chancellor considering further to involve all employers in the challenge that lies ahead, especially those who do not do much at the moment?

Gordon Brown: I am grateful to my right hon. Friend. It was under his period at the Department for Workand Pensions that unemployment came down from1.6 million to the 900,000 of today. He is absolutely right that the central question is how to persuade people to get the skills for the future. He knows that the Train to Gain programme, with which he was involved in the DWP, is now equipping 90,000 men and women in the workplace with the necessary adult skills. Only yesterday, I visited a college where men and women who had previously thought that they would never get a skill were encouraged to come into college to acquire it. Many of them were talking about starting their own businesses in the future. That is the way forward. I appreciate what my right hon. Friend says about Oxford. He is an excellent representative of the constituency around which a huge amount of science and innovation is going on. I can give him the assurance that we will continue to invest in science and innovation in his constituency.

Edward Leigh: The National Audit Office has expressed concerns about the claimed efficiency gains because of double counting and confusion about baselines, which also applies to the Chancellor's point a few moments ago about the saving of civil service numbers. Are the efficiency claims believable when they ignore the cost of setting up and running the Gershon efficiency projects?

Gordon Brown: Mr. Gershonactually, I think it is now Sir Peter Gershonundertook the review. There was no huge staff of civil servants around him, but he recommended that 84,000 civil service jobs had to go. As a result of his recommendations, large numbers of jobs have gone in the Department for Work and Pensions, Her Majesty's Revenue and Customs and other Departments. The hon. Gentleman can see the figures for himself. There have been big changes and more will take place in those important Departments.
	I understand where the hon. Gentleman comes from. He wants 50 billion of tax cuts, so he would cut back very heavily on public services. We have to get the right balance between the public services that we need, taxation that is fair with low rates wherever possible and, at the same time, stability in the economy. My job as Chancellor is balancing tax stability and the public spending that we need. I believe that we are making the right decisions today.

Kali Mountford: The textiles industry is facing major global challenges, so as we consider the innovations that it needs, is it not right to back proposals such as those in Yorkshire on the new technical textiles? We need to look into getting university-level degree standards, so that people can go right through from school into university. We should make the investments that we need to take those industries forward.

Gordon Brown: My hon. Friend has pioneered work that ensures that the textile industry can upgrade and, because of the quality of her work, get the design lead that will enable us to sell textiles to the rest of the world. A great deal of good work is being done in my hon. Friend's constituency and throughout Yorkshire and the surrounding area to upgrade textiles with new investment, taskforces and skills investment. We will continue to give her constituents the opportunity to get the necessary adult skills, so that we can move to the next stage of globalisation. It is a measure of our commitment to doing so that the Leitch report recommends major targets that I believe we will be able to meet. One such target is the need substantially to increase apprenticeships.

Stewart Hosie: Under this Government, we have seen average growth in the UK of about 43 per cent., compared with 35 per cent. in Scotland, and an average growth rate over the decade of 2 per cent. in Scotland and 2.9 per cent. in the UKa 30 per cent. growth gap. If we had matched even the UK's growth rate, Scotland's economy would be 5 billion bigger1,000 a head. If we had matched low-corporation-tax Ireland's growth rate, the Scottish economy would be 33 billion bigger6,000 a head.
	It is extraordinary that, in the statement today, there was nothing at all on the Scottish growth gap. Indeed, the Chancellor mentioned Scotland once, fleetingly,34 minutes into a 37-minute statement. Instead, he comforted himself, as usual, with the mantra that there have been 38 consecutive quarters of growth under Labourignoring the fact, of course, that there have been four downturns in Scotland and a full-blown manufacturing recession.
	The statement today failed to provide any coherent strategy for Scottish economic growth and did nothing for individualsnot even a word of comfort for those in the 328,000 Scottish households who now live in fuel poverty in an energy rich nation such as Scotland. Under the Chancellor's stewardship over the past few years, we have witnessed an increase of more than 40,000 homes suffering

Mr. Speaker: Order. The hon. Gentleman must ask a question. This is not an opportunity for him to make a counter-statement. I can allow him to continue if he asks a question, but it must be very brief. He has had a good allocation.

Stewart Hosie: Thank you, Mr. Speaker.
	May I ask the Chancellor what part of the 30 per cent. growth gap he is proud of? If he is ashamed of it, what precisely does he intend to do about it?

Gordon Brown: Under a Labour Government in Scotland, unemployment is down, employment is up, growth is up and living standards are up. The one thing that would damage Scotland most of all would be to pursue the policy of the Scottish National party, under which there would be a separate Scottish pound, a separate Scottish interest rate and separate Scottish border arrangements. I will give just one example. Probably the biggest industry in Scotland is now the financial services industry, on which 125,000 people depend. If 93 per cent. of that industry's exports go to England, I think that the hon. Gentleman had better wake up to the fact that an independent Scotland could not guarantee having the jobs or the growth that we have now. He would be ashamed of himself putting forward a policy that is so intellectually bankrupt.

Joan Walley: I welcome the measures in the pre-Budget report that relate to the environment and follow on from the Stern report, but given the challenge of the global economy, it is crucial that we find a way to link action locally to the broad general concepts. Will the Chancellor take a particular interest in what is happening in north Staffordshire and Stoke-on-Trent, because of the job losses that we are still getting and the need to promote enterprise and to join up the education and skills agenda and so on? Will he meet north Staffordshire MPs to ensure that we take forward that whole agenda?

Gordon Brown: I will meet north Staffordshire MPs againas my hon. Friend knows, I have met them beforeto talk about the very issues of the future: not only manufacturing, but jobs in the area. As she knows, we have tried to get resources into both her constituency and the rest of the area, so that we can create new job opportunities. That is our aim. The way to respond to globalisation is to give people the skills and opportunities for the future, and that is what the statement is about.

Michael Fallon: How can the Chancellor claim that his fiscal rules are fully met when so many PFI liabilities and public sector pension liabilities are kept off the balance sheet? Given that those commitments are guaranteed, why are they not properly counted?

Hon. Members: Hear, hear.

Gordon Brown: Opposition Front Benchers say, Hear, hear. We operate exactly the same rules and procedures that operated under the previous Conservative Government in this respect.  [ Interruption. ] If the shadow Chancellor or his colleagues are saying, This is the Enron, it is a criticism of the previous Government for introducing those rules.
	The hon. Member for Sevenoaks (Mr. Fallon) should say in the House what he is prepared to say on television. I have just been handed a note to say that, only a few minutes ago, he told Sky News that the Chancellor has done a good job getting the economic framework stable. Why does he not say that in the House?

Jim Cousins: May I ask my right hon. Friend to go back to his Budget three years ago, when he announced that Newcastle would be a science city? That is reinforced today by his pledge for more money for medical research and stem cell research, which are the heart of Newcastle's recent world-beating scientific successes. May I ask him to give Cabinet leadership for science? May I ask him to share out the money that he is making available, not through closed old boy networks, but in an open and accountable way, so that if, as I believe, Newcastle can have 50 per cent. of the best ideas, it can have 50 per cent. of the money?

Gordon Brown: I am grateful to my hon. Friend for raising those issues. I have talked to him about them before. I have visited the stem cell research that is being done in Newcastle, which is one of the world leaders, and Britain is one of the world leaders in stem cell research partly because of what is being done in Newcastle. We are determined to support that. I think that he will find that the new arrangement, by pooling the NHS research budget and Medical Research Council money and working with the companies, allows us to be more proactive in the projects that we can support to make new drugs and new treatments more easily available. I am absolutely sure that Newcastle's leadership on that will be rewarded when allocations are made.

John Redwood: I welcome the Chancellor's realisation that a lack of transport capacity is a major constraint on our competitiveness. Given his new policy of giving that priority, what new road and rail projects will start in the next couple of years to show that that is more than words?

Gordon Brown: More than started under the previous Conservative Governmentwe have trebled the amount of spending a year on transportbut the right hon. Gentleman puts the dilemma that the Conservative party must solve. Yesterday, we had a transport debate in the House of Commons and all the Conservative Back Benchers were urging that there should be more spending on transport, while the shadow Transport Minister was saying on his website that corporation tax should be cut in half, losing 20 billion in revenue. How can the shadow Chancellor not control the Conservative party's Front-Bench representatives? How can he not ensure that they do not make public spending commitments that they cannot meet and that they do not make announcements on tax cuts that he cannot afford? A year into his job as shadow Chancellor, he has lost complete control over the Conservative party's Front Benchers.

Mark Durkan: May I assure the Chancellor that there will be a very significant welcome for the very significant commitments that he has made or confirmed today in his report for education, child benefit, community-based child support and, of course, the support for the continuing efforts against child poverty globally. Those commitments confirm his continued determination to ensure that every service, every system and every budget proclaims that every child is our child. Of course, as well as social support, economic opportunity for our children's future depends on innovation and competitiveness, which he also addressed. In that context, for the Northern Ireland political parties, can he colour in the sketchy outline of 1 November for an innovation fund?

Gordon Brown: My hon. Friend puts the point that, first, we should act on child poverty, and we will; and secondly, that we should act on science and innovation, and I have made announcements today about what we will do. Thirdly, he rightly raises the question of the future financial framework for Northern Ireland. I have put proposals to the Northern Ireland parties, and I was grateful to him for attending the meeting when we discussed those matters. I am prepared to make a longer-term settlement to the Northern Ireland Assembly, provided that it can be reconstituted by the agreement of all political parties. I look forward to further discussions with him and other Members of the Assembly about how we can expedite that process. We remain ready to give the financial support that is necessary, so that Northern Ireland, particularly its economy, can move forward as a result of the Assembly being reconstituted, and we will continue to make that offer.

John Thurso: The Chancellor announced an increase in fuel duty, with which I concur, as it must be right to redress the balance between public transport and motoring; but may I ask him again to address the punitive premiums paid in remote rural areas, where there is no alternative to the car, as they cause real hardship and social exclusion?

Gordon Brown: The hon. Gentleman will know that we introduced a varied licence fee, which is of benefit to people making choices in rural areas. That is one of the ways that we have approached the issue. We have also put considerably more money into public transport, as a result of the decisions that we have made to allocate more resources in that area. For elderly people, of course, a national bus pass scheme will be introduced very soon. So we continue to look at what we can do to help rural areas. We continue to look at the variable elements of the vehicle excise duty system, and we continue to do more to provide for public transport in constituencies such as his.

Tom Clarke: In view of the Chancellor's recent meeting with Cardinal O'Brien from Edinburgh and other faith leaders and the quite remarkable growth that he has again announced today, can he confirm that the Government are still on target to achieve the United Nations figure of 0.7 per cent. of gross national income being spent on aid and still on target to make our contribution to achieving the millennium development goals?

Gordon Brown: I am grateful to my right hon. Friend, because he has been one of the leading advocates throughout the world of action to achieve the millennium development goals and he has a proud record of passing legislation in this House that requires us to keep to the targets that we have set. Yes, we are intent on the 0.7 per cent. target. We are also intent on meeting the millennium development goals. In the next few months, we are launching the education for all initiative, which is designed to get every potential primary school pupil into education by 2015. There are 110 million children who are not. At the same time, Cardinal O'Brien, whose work in this area I applaudparticularly his visits to Africa to give hope to people in the areas of greatest needwas present at the launch of the vaccination initiative. We have agreed that500 million children will be offered vaccination. As a result of that, over the next 10 to 15 years, it is possible that 10 million lives will be saved. I was grateful that the Pope sent his representatives to that launch. The Archbishop of Canterbury was there, as was the Chief Rabbi. Muslim, Hindu, Sikh and other faiths were represented. It is a measure of the consensus among the Churches that something needs to be done that Governments around the world are being influenced by Cardinal O'Brien and many like him.

Peter Viggers: To complete the picture placed before us today, will the Chancellor tell us what part he thinks that he, personally, played in the collapse of final salary pension schemes? As a former opponent of means-testing, what pride does he take in the fact that 40 per cent. of the population, and well over 50 per cent. of the pensioner population, are now subjected to means-tested benefits from the state?

Gordon Brown: A total of 3.3 million people have pension credits as a result of the Government's decision. In many cases, they are 30 or 40 a week better off as a result. If the hon. Gentleman is going to say to the pensioner community of this country that he will take away pension credit, and that that is part of the Opposition's policy

Graham Stuart: It is not.

Gordon Brown: The hon. Gentleman says that it is not. Is it or is it not part of the Opposition's policy? If the hon. Member for Gosport (Peter Viggers) is criticising what we are doing, he ought to be able to put up an alternative. Pension credit goes to 3.3 million people. It is easy to claim; it can be done by telephone. It is claimed for a period of years, not just for one year. He should be encouraging his constituents, rather than declaiming pension credit, because it is a proper way forward. As for the reform of pensions generally, I hope that he will support the pensions Bill that will be brought forward in the next few months to get a framework that we can agree across parties for the development of pensions for the future.

Sally Keeble: I welcome the extra investment in transport, housing and skills, the innovative policies for community ownership, and the green policy. Will my right hon. Friend say how, in moving forward, he intends to ensure that the delivery agencies on the ground, including local councils, are fit for purpose? I want to make sure that my constituents get the benefits of the announcements that he has made today.

Gordon Brown: I hope that my hon. Friend will lobby to have the new Warm Front initiative, which will extend Warm Front through community-by-community programmes. We will approach people in each area almost on a house-to-house basis, offering them insulation and central heating. It may be that her constituency or others can be included in that programme. The fact is that there are still millions of houses that are not insulated and many houses that do not have central heating. It is possible, under the arrangements that we have negotiated with the energy companies, for more people to get the benefit of both heating and insulation. It is our job to go out and persuade people that that is worth doing. For low-income pensioners, it is free. For many, there is a large grant available. I hope that the community-by-community projects that we are now proposing, to reach that group of people that we have missed so far, will cover a large number of constituencies.

Brooks Newmark: During the Chancellor's rather long statement on the pre-Budget report, he talked about a 1 billion tax raise through air passenger duty rates. However, I notice in table 1.2 that the tax going to be raised this coming year is not1 billion, but 2 billion. Will he please confirm that?

Gordon Brown: The additional money that is raised from air passenger duty is about 1 billion.

David Clelland: In tackling climate change, will my right hon. Friend look at what seems to be a nonsensical position whereby employees who are given travel concessions by their employer to use public transport have that taxed as a benefit, whereas the provision of free car-parking places at places of work is not taxed in that way? Will he look at the anomaly that has arisen as a result of the otherwise welcome increase in the minimum wage, whereby many working carers are losing up to 46 a week because the minimum wage has taken them marginally above the 84 earnings threshold?

Gordon Brown: My hon. Friend makes two important points. I will look at each of them in detail in the run-up to the Budget. On the tax relief issue, I will arrange a meeting with him and Treasury officials. On carers, we will look carefully at the interaction of the minimum wage and tax credits.

Henry Bellingham: The Chancellor mentioned making life easier for people on low incomes. Let us look at last year. How many tax credit recipients were overpaid and how many were underpaid?

Gordon Brown: I will send the figures to the hon. Gentleman. We are introducing a better system today so that there will be less overpayment. The issue is that we want to be as flexible as possible in responding to people's situations. If their income goes up, their tax credit has been too high and therefore it is right to ask to recover it. We have arrangements in place whereby if the income change is reasonable, we will not ask for money back. The challenge is related to the difference between having a relatively inflexible system that cannot be adjusted during the year and a flexible system that enables us to respond to changes in the labour market. That is the challenge that we have always faced on tax credits. I believe that we were right to go for a flexible system, but obviously we must make sure that the figures for people who have to repay money are in order. That is why we are trying to reduce them with the change that we are making today.

Karen Buck: We are in the middle of a 70 million investment programme involving building three new schools and a 140 million investment programme involving building schools for the future. I assure my right hon. Friend that educational spending is not the spin claimed by the Opposition. It looks like teachers, computers and new school buildings. However, is he also aware that inner London, in particular, faces exceptional challenges with education and skills? As a consequence of that, I have one warda mere mile from the west endin which 83 per cent. of all children are growing up in workless households. In the run-up to the Budget and the spending review, will he look urgently at skills training, the tax credit system and affordable child care to make sure that no child or community is left behind?

Gordon Brown: I am grateful to my hon. Friend, who persistently puts the case for her constituency both to me and other Ministers, and quite rightly so, because of the degree of need in the constituency. We will listen to what she says about the issue of the number of people in poverty in her constituency and the need for better training. I agree with her entirely that it is easy to talk about the schools and educational institutions capital budget of 10 billion, which I announced, as simply a figure, but it is thousands more schools repaired, hundreds of children's centres, better colleges all round, more books, whiteboards and computers, and modern facilities. The Conservatives may want to scorn what are major changes, but if they had done half as much as we have since we came into power, perhaps they would not have been out of power for so long.

David Gauke: Will the Chancellor confirm that he has today downgraded the GDP growth forecast for 2008 and will he also confirm whether he would have met the golden rule had he not changed the dates of the economic cycle last year?

Gordon Brown: The trend growth rate is exactly the same. If the hon. Gentleman is saying that if growth is upgraded this year, it should have no effect on future years, he is not living in a world with economic cycles and economic change.

Graham Brady: Boom and bust.

Gordon Brown: Boom and bust is a term that applied to the Conservative years and two of the worst recessions in history. If the hon. Gentleman wishes to have a debate on boom and bust in the House of Commons, we are happy to do so. Growth this year is 2frac34; per cent. and is higher than forecast. Growth next year is between 2frac34; and 3frac14; per cent. and therefore is higher than this year, and growth in 2008 is forecast to be2frac12; to 3 per cent. When did the Conservatives ever have 12 years of economic growth?

Anne Snelgrove: I congratulate my right hon. Friend on the extra8.3 billion capital investment in schools, which will make a huge difference to my constituency. I thank him for resisting the temptation to introduce a third fiscal rule. Will he confirm that such a rule would prevent all the extra investment in education that he has announced, including reading recovery and books for children at five and 11, which are so necessary to meet his strict targets for skills in 2020?

Gordon Brown: If we had to adopt a policy to cut28 billion of public spending now, it would be the equivalent of closing down most schools in the country. It would not just prevent capital investment, but mean that we could not hire teachers or pay the other bills of schools. Conservative Members will have to think about this. They are promising to spend more, but they say that they are going to tax less and that they would borrow less because they say that we have a structural deficit. They then say that their fiscal rule requires a reduction in spending. None of that adds up, but that is typical of the Conservative party. It left us in exactly that situation in the early 1990s and we are not going back to that.

Danny Alexander: The Chancellor rightly emphasised the need for fiscal measures to tackle the causes of climate change. Does he also accept that measures are needed to tackle the consequences of climate change? As a Scottish Member, he will know that the Scottish ski industry has been one of the first industries in this country to feel directly the consequences of climate change. Would he or one of his ministerial colleagues be willing to meet representatives of the Scottish ski industry to determine whether fiscal measures could be brought forward to help to alleviate the impact of climate change on that important sector of the rural economy?

Gordon Brown: If meetings are necessary on this issue, I am sure that they can take place. At the same time, I hope that the hon. Gentleman understands that there are now 200,000 more jobs in Scotland as a result of the Labour Government. Whatever changes are taking place, some of which are because of the environment, we are determined to replace jobs that are lost and we will continue to do so. That is why the Scottish Administration have adopted a new policy, with a new agency, to move towards full employment. Given that his party forms part of that Administration, I hope that he will support the policy.

Dari Taylor: I warmly welcome my right hon. Friend's statement and everything that he said about child poverty, especially. As he will know, the Adoption and Children Act 2006 is working well. With crucial support from the Children and Family Court Advisory and Support Service, homes are being found for vulnerable children, many of whom used to live in institutions, and resolutions are being delivered for families in dispute. However, may I persuade him to examine the situation that CAFCASS faces? It has a standstill budget, and although the work that it does is excellent, the demands on it are exponential. The children that it helps usually have special needs. We need more money, so will my right hon. Friend look at the matter?

Gordon Brown: I will consider in detail the information that my hon. Friend has given me about that important agency. Obviously, there is not money to pay for everything. If I am right, the agency has the same budget as it did last year, but I shall examine the matter.

Michael Penning: When the Chancellor was in opposition, he made a statement that if the parliamentary ombudsman found maladministration against a Government and people had lost out, that Government should compensate those pensioners. Why has the Chancellor turned into a hypocrite when the parliamentary ombudsman has found against the Government

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will withdraw that unwise language immediately.

Michael Penning: I apologise, Mr. Deputy Speaker.
	Why has the Chancellor refused to accept the parliamentary ombudsman's ruling that there has been maladministration under the Government and that they have stolen millions of pounds of pensions from our pensioners?

Gordon Brown: If I am right, the criticism was made against the previous Government [ Interruption. ] This is a Labour Government and that was a Conservative Government. Since 1997, we have created the pension protection board and a scheme to help people who were not protected before the board came into being. We have done more than any other Government to deal with the problems faced by pensioners who have lost their pensions.

Helen Goodman: In addressing Labour's historic commitment to end child poverty, the Chancellor was right to talk about the importance of child health. Babies with low birth weights are more likely than others to have learning disabilities and to suffer from heart disease and diabetes throughout their lives. The best start that a child can have is a healthy mother. Will the Chancellor explain in a little more detail the changes to child benefit that he proposes to make to tackle the problem?

Gordon Brown: At the 29th week, mothers to be are eligible to receive maternity grants. I propose that we consider whether we can give child benefit to mothers to be at that time so that they can get the nutrition that is necessary and prepare for the birth of their child. I am happy to talk to the Select Committee about that proposal.

James Clappison: Will any aspect of the Chancellor's announcement about universities and tuition fees affect the situation under which English and Welsh students at Scottish universities pay much higher fees than Scottish students or students from anywhere else in Europe? Does the Chancellor think that that situation is fair?

Gordon Brown: I made two proposals on tuition fees: one in relation to voluntary work and the other in relation to children in care. The hon. Gentleman has to accept the principles of devolution. Once there is devolution, the Scottish Parliament and the Welsh Assemblyand, hopefully, the Northern Ireland Administrationcan make decisions that are relevant to their needs. I am determined to ensure that there is sufficient educational investment. When we came to power, such investment represented 4.7 per cent. of national income, but that figure has been rising to 5.5 per cent. The hon. Gentleman should be supporting us for that, not criticising us.

Clive Efford: I welcome my right hon. Friend's statement and especially the extra resources for schools. Although extra funding per pupil and for schools is welcome across the board, does he agree that we need to target resources at the children with the greatest educational needs? Yesterday's Ofsted report recommended extending to other areas the inner city challenge scheme that has been implemented in London. Teachers involved in the scheme have reported that having access to external expertise and, most importantly, extra resources has helped them to increase attainment in their secondary schools. Does my right hon. Friend agree that such a scheme is a way of tackling inequalities in education?

Gordon Brown: My hon. Friend is absolutely right. The matter concerns us all. The number of young people who are staying on in education, especially in school, is not high enough, especially given the challenges of the global economy that I have mentioned. Some 90,000 young people now receive educational maintenance allowances. However, my hon. Friend is right that we should build extra help around that. We can learn from what has happened in London. I have suggested that there should be more mentoring support and a project to catch people in their earlier yearsbefore 14when there is a danger of them drifting into trouble and antisocial behaviour. At the same time, we need to persuade people who leave school at 16 to stay on in other forms of education. I look forward to discussing those important ideas with my hon. Friend.

Peter Bone: The Chancellor will recall that more people were unemployed in Wellingborough in October 2006 than in October 1997. He will also be aware that we have seen the largest rise in unemployment this year of any country in the developed world. Will that be the Chancellor's legacy to the British people?

Gordon Brown: For the record, I am happy to read out the figures for Wellingborough. In May 1997

Peter Bone: October.

Gordon Brown: The hon. Gentleman seems to think that there was an election in October 1997. In fact, we were elected in May 1997. The figures for May 1997 show that 1,826 people were unemployed there, while the latest figures, from October 2006, show that 1,535 were unemployed. I say to the hon. Gentleman, as a reasonable man, that in the period we have been in government, unemployment has fallen in his constituency.
	As far as the general situation is concerned, I think that the hon. Gentleman will find that 1.6 million people were unemployed when we came to power. The figure is now less than a million. He will also find that there were 26 million people in employment when we came to power, whereas there were 29 million at the last count. Over the past nine years, unemployment has fallen and employment has gone up substantially [ Interruption. ] If the Conservatives want a debate on unemployment, Labour Members will welcome it. Conservative Members might then explain why, when they say that they are attacking unemployment, they spend most of their time attacking the new deal, which is designed to stop unemployment.

Angus MacNeil: How much time did the Chancellor spend thinking about the islands when he doubled air passenger duty rates? He should know that there are very few routes over the islands that can be completed in a reasonable amount of timemany involve travelling for 12 hours or longer. Is Labour turning its back on the Western Isles? If so, the price will be paid next May, when Alasdair Allan will take the seat.

Gordon Brown: As the hon. Gentleman knows, there are special arrangements for the islands. He had better read the document closely.

Philip Dunne: Why, having raised 2 billion today for the next year, did the Chancellor choose to make barely a passing reference to the issue that is of the strongest concern to everyone in my constituency and many people throughout the country: cuts in service provision in the NHS? Out of the 265 pages of the pre-Budget report, only two paragraphs are devoted to health service provision.

Gordon Brown: The health service has already beengiven 5 billion more this year, and it will get between 5 billion and 6 billion more next year; I have announced those figures before. The hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) says that he resents the fact that we had to raise money from air passenger duty. I think that he said that we would raise 2 billion [Interruption.]

Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman, but I will not continue the questioning or call the remaining Members unless there is quiet on the Conservative Benches.

Gordon Brown: The issue is that if we are to pay for hospitals and health servicesand we are spending5 billion more on the health service this year than we did last yearthat money has to be made available, and the money depends on striking the right balance between tax spending and stability. The hon. Gentleman criticises us for our tax measures, although he himself demands more spending, and that is precisely the contradictory position that the Conservative party is starting to represent.

Graham Stuart: It is hard to tell what the Chancellor does more: wriggle or fiddle. Today, there was only a single occasion on which he gave a straight answer to a straight question. Will he confirm that productivity growth under the Major Government was, on average, higher than it was at any time under this Labour Government, and that productivity growth has fallen in each term of the Labour Government?

Gordon Brown: I just gave the figures: productivity in the last economic cycle was 1.9 per cent., and productivity in this cycle is 2.4 per cent. If the hon. Gentleman wishes to answer questions, he should look at the contradiction in his own position. According to his website,
	GrahamWorking for Beverley  Holderness ... a tireless worker,
	demands more money for pupils, hospitals, and rural transport. He is also a member of the Cornerstone group that wants 50 billion in tax cuts.

Mark Pritchard: If the Chancellor does not have one of my leaflets, I am happy to send him one. I welcome what he said about improving public procurement, but I have concerns about his comments on expanding the powers of the Office of Government Commerce, which has 22 criteria for judging sustainable procurement. Why are we expanding its powers? Is that not in direct contradiction to his aim of improving public procurement?

Gordon Brown: A document is to be published on procurement, and the hon. Gentleman will understand that that process extends right across Government. Today I announced, on procurement, that schools and designs for schools will be subject to an excellence test for carbon. What I announced today about the Office of Government Commerce was different: it was about the role that it is to play in reducing the fees that the Government pay to private agencies.

DELEGATED LEGISLATION

Mr. Deputy Speaker: With the leave of the House, I shall put the two motions together.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Compensation

That the draft Compensation Act 2006 (Contribution for Mesothelioma Claims) Regulations 2006, which were laid before this House on 2nd November, in the last Session of Parliament, be approved.

Rehabilitation of offenders

That the draft Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment No. 2) (England and Wales) Order 2006, which was laid before this House on 16th November, be approved. [Tony Cunningham.]
	 Question agreed to.

European Affairs

Motion made, and Question proposed, That this House do now adjourn. [Tony Cunningham.]

Margaret Beckett: This month, the European Council will be held on 14 and15 December, and the formal agenda will, as usual, cover a wide range of topics. On Africa, we expect that the conclusions of the Council will inject some momentum into the EU Africa strategy by highlighting key priorities for action. On climate change, we will push to maintain the momentum generated at Lahti by strongly reaffirming what was agreed, at that summit, on the linkages between energy security and climate security, on the strengthening of the EU's emissions trading scheme, and on establishing a new process for Heads of Government to review progress and set a forward-looking agenda.

John Redwood: rose

Margaret Beckett: I shall get a little further with my speech before I give way, if I may. We expect that a significant proportion of the Council will be spent discussing the justice and home affairs agenda and, in particular, migration. Goods, money and people are moving around the world in greater volumes and more freely than ever before, and that makes the fight against terrorism, organised crime and illegal migration more complex and difficult.

Angus Robertson: I welcome debates on European business on the Floor of the House, but may I raise an issue that I have raised with the Minister for Europe, and in previous debates? It concerns timing. Today's debate coincides with the start, in15 minutes' time, of a meeting of the European Scrutiny Committee. How can Members on either side of the House who have a particular interest in European business possibly be in two places at the same time?

Margaret Beckett: I have some sympathy with the hon. Gentleman, because it is unfortunate when such situations occur, as they do, from time to time. He will know, however, that it is not a matter for me.
	As I say, we expect that a substantial part of the agenda will be justice and home affairs. The Hague programme of 2004 set out a comprehensive framework for EU co-operation, and it was supplemented by the action plans on counter-terrorism, drugs and human trafficking, and by the global approach to migration that was agreed at the Hampton Court summit during the UK presidency last year. The Council will examine how we can use the 2006 review of the Hague programme to put an even tighter focus on the practical implementation of those measures, and on how we can make sure that those clear priorities are given the appropriate resources.

Michael Ancram: Will the Foreign Secretary take the opportunity of the Council to reassert what was admitted at the timethat the Dutch and French referendums, which resulted in a no vote in 2005, effectively meant that the European constitution was well and truly dead? What does she intend to do to thwart the declared intention of the German Chancellor to use the German presidency to breathe new life into it?

Margaret Beckett: To be honest, I very much doubt that the subject of the constitutional treaty will be raised, because as the right hon. and learned Gentleman will know, the German presidency, which begins in January, is committed to undertaking a thorough review to try to establish what the position is and whether there is consensus, and if so, what it is. I doubt that the outgoing Finnish presidency will want its last Council to be dominated by a subject that it cannot possibly draw to a conclusion.

Tobias Ellwood: Will the subject of the two European Parliaments be on the agenda? Many Opposition Members think that a lot of money is wasted by having a Brussels Parliament and a Strasbourg Parliament. Phenomenal amounts of money are wasted every year. Will she put forward the idea that there should be only one Parliament, and so save the taxpayer huge sums of money?

Margaret Beckett: Let us be quite clear, in case anyone should misunderstand: of course, there is one Parliament, but it uses two buildings. I take the hon. Gentleman's point entirely, and indeed we have long expressed sympathy with it. This is not a pejorative point, because a decision on the subject would have to be unanimous, but the decision to keep using two buildings was taken under the last Conservative Government, and not under this Government. However, I know that the Conservative Government tried hard to change that decisionand so do we, when any opportunity arises.

John Redwood: Will the Foreign Secretary promise the House that she will not offer up the sacrifice of the veto in any more areas of policy whatever, and does she accept that we need to keep the veto powers that we hold?

Margaret Beckett: I never cease to be astonished by Conservative Members' cheek in raising that issue. We never gave up the vetothe Conservatives did. In fact, Lady Thatcher did.

Daniel Kawczynski: Will the Foreign Secretary give way?

Margaret Beckett: No. Next week's agenda will be a full one, but one topic is likely to dominate the discussion: enlargement. We hope that the General Affairs and External Relations Council meeting, which takes place on Monday and Tuesday, will settle questions that relate specifically to Turkish accession, but there is a possibility that they will need to be on the European Council's agenda for Thursday and Friday. The Council will, in any case, consider issues relating to enlargement more generally.

Keith Vaz: On enlargement, the Government's position remains one of firm support for Turkey's entry to the EU. What does the Foreign Secretary perceive to be the main stumbling block to its entry? Obviously, in recent months, there has been a problem with regard to Cyprus. Does she feel that those problems are surmountable, and that we can get on track, to try to enable Turkey to open some more chapters?

Margaret Beckett: I am sure that those problems are surmountable, but I will not disguise from my right hon. Friend or from the House the fact that there are a range of difficulties, or that the problems are complex. However, I believe that they can be addressed and, indeed, overcome in time.
	Members on both sides of the House have been admirably clear and consistent in their support for enlargement. That stems from a recognition that it is in the best interests of this country and, indeed of Europe as a whole, for the process to continue. The European Council offers a chance for EU leaders to send a strong signal that our strategic commitment to enlargement remains. The EU has been asked, not least by Dutch and French voters, but by others, too, to show that it has brought concrete, tangible benefit to its citizens. Enlargement is the single process that has done most to improve the lives of the people of Europe as a whole. In making that claim, I am referring in part to the startling transformation that EU membership has wrought in the lives of people in new member states. When I accompanied Her Majesty the Queen on her state visit to the Baltic states earlier this year, we saw countries that were unrecognisable from only a decade ago.
	It is not just those coming into the club who have benefited. We have all done so. Across southern Europe, we are no longer bordered by unpredictable dictatorships in Greece, Spain and Portugal, but by stable democracies. To the east, our neighbours are not stagnant communist states, but dynamic, vibrant and free nations. Each successive wave of enlargement has provided new jobs, new markets and new opportunities for investment. The 2004 enlargement added 74 million consumers, making the EU the world's largest single market, and the economies and workers of the new member states have boosted growth across Europe.

Daniel Kawczynski: The Foreign Secretary mentioned the new eastern European states that have joined the EU. She will be aware that Poland is experiencing terrible difficulties exporting meat and agricultural products to Russia because of Russian boycotts. Does she agree that we must help Poland and other countries if their trade is unfairly blocked by the Russians?

Margaret Beckett: I am aware from my former membership of the Agriculture Council that there are such problems from time to time. The Commission and EU member states as a whole do everything that they can to support and help to resolve those problems when they occur.

William Cash: rose

Margaret Beckett: I shall give way to the hon. Gentleman, as it would not be right to have the debate without an intervention from him.

William Cash: The Foreign Secretary referred to the free nations. She will be aware that further integration has undemocratic consequences, as it has an impact on qualified majority voting and states' ability to decide the policies they want in general elections and subsequently. In the light of what she seems to want, why does she not espouse the proposal that some of us have introducedof an association of nation states in Europe instead of the European constitution and its fellow travellers?

Margaret Beckett: I am afraid that I reject the notion that the countries that have joined have become less democratic as a result and, more to the point, so would their citizens.
	The same process of improvement has taken place in Romania and Bulgaria. Both countries have made dramatic progress since the EU invited them to join in 1999. They have free media, they hold free and fair elections, and they benefit from thriving civic societies. Economic growth has recently averaged 5 per cent. a year, unemployment has fallen, inflation is low, and standards of living have improved dramatically. That, too, is good for all of us. UK exports to Romania have trebled in a decade. Our exports to Bulgaria increased by 41 per cent. last year. Better governance and a stronger judiciary make our investments in both countries less risky, more transparent and more competitive.

Mark Pritchard: Will the Foreign Secretary predict how many people will come from Romania and Bulgaria following their accession in January next year? As she will be aware, the Government predicted that 15,000 economic migrants would come to the UK from the last group of accession states, but in fact the figure was about 500,000. May we have a prediction, as well as a little more detail about the transitional derogation that the Government have mentioned?

Margaret Beckett: First, the Government did not make a prediction.  [ Interruption. ] No, the Government did not make a prediction. Someone at, I think, the London School of Economics or an independent group or organisation made a prediction, but I can assure the hon. Gentleman that the Government themselves made no such prediction. Secondly, most people who have come to this country have come to work, and they are in employment. They have not all stayed, and they will not necessarily stay in the long term. That pattern has emerged not just in this country but elsewhere as a result of enlargement. As for Romania and Bulgaria, the hon. Gentleman will know that the Government have put in place processes to try to control the flow of people into the work force.
	That is not to suggest that enlargement is automatically an easy process. Romania and Bulgaria still have some way to go in strengthening the rule of law and in tackling corruption and organised crime. Indeed, the process of enlarging the EU to include those two countries, as well as the 10 new member states that joined in 2004, has led to a refinement and tightening-up of procedures. The requirements to join the EU are more rigorous and more carefully monitored than ever before, and they apply to Turkey and Croatia. Effective conditionality is one thing, but fresh conditions are something altogether different. Having agreed membership requirements and invited people down that path, it would be quite wrong to put up new hurdles or to deliberately construct barriers designed to halt this or any further enlargement. The strategic case for enlarging the EU to include the candidate countries and to keep the door open for other European neighbours remains as powerful as ever.

Ian Davidson: As someone who has always supported the principle of enlargement, may I seek clarification of the recent paper produced by Howell James, the Whitehall co-ordinator of propaganda on those matters, who asked whether we should link the question of Europe to the Eurovision song contest and UEFA football tournaments? Given that Israel and Russia take part in the Eurovision song contest, and that Albania, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan and Ukraine are members of UEFA, is it the Government's policy to expand the European Union to include those countries?

Margaret Beckett: Not in the very near future. It is legitimate for my hon. Friend to poke fun at that publication, but all that was discussed was how we communicate the good news about Europe as well as the bad news, which is zealously communicated by everyone who can do so.
	The strategically important countries that we are discussing will be our neighbours, and they will play a pivotal role in our future, whatever decisions Europe makes. The choice facing us is what that role will be. It is in all our interests that they should become closer, stronger, richer and more reliable allies. That being the case, it would be foolhardy in the extreme to turnour back on what has proved to be one of the best ways of ensuring that outcome. The prospect of EU enlargement is probably the most powerful example of so-called soft power available to any country or international organisation.
	In all too recent history, for example, the Balkans have been a crucible of violence and instability in the heart of Europe. Indeed, there are still significant EU and NATO forces in the region. We therefore have a direct interest in tackling Balkan insecurity and encouraging those states further down the path of political and economic reform. Croatia is showing the way for others in the region by making the necessary reforms. It has low inflation, a stable currency, and rapid economic growth. It has bright, hard-working young people and strong scientific credentials. It has taken on international responsibilities by, for example, sending peacekeepers to Afghanistan and working with British police, among, others, to fight drug smuggling and money laundering. To see how far Croatia has come, it is worth noting that although it is little more than a decade since a massive war, every year more than 250,000 British tourists choose to go there on holiday. Of course there are more conditions that Croatia must meet, particularly in reform of the judiciary and the fight against corruption, but it is on the right path, and it is on that path because of the prospect of enlargement.
	It is worth being frank with each other at this point. There are some in Europe who have no problem with Croatia joining the EU but who do have a very real problem with Turkey joining, yet the strategic case for Turkish membership is at least as compelling as it is for any other countryin fact, probably much more so. Just like any other country, Turkey must fulfil its obligations to the EU. In the case of the Ankara protocol, Turkey has not yet done so and it is right that the EU should give a clear response. But that response should be proportionate and should be designed to get Turkey to fulfil its obligations and maintain the momentum of reform. It should not be a pretext for derailing negotiations. We need to agree and set out clearly what we expect Turkey to do. It is then up to Turkey to decide how quickly to reform and progress towards accession.
	We, the UK Government, judge that the current measures tabled by the European Commission are too harsh and risk being counterproductive. That would be a very poor result for the people of Turkey. It would also be a very poor result for Europe. Look at some of the strategic challenges that we are facing: increasing global competition from Asia; insecurity in our energy supplies; seemingly intractable problems in the middle east; rising extremism trying to drive Muslims and non-Muslims apart; an ageing population and a looming pensions crisis; the desire for Europe to play a more active role beyond its borders; and both at those borders and within them, the need to tackle drugs, organised crime and illegal migration.
	Turkey could play an immensely positive role in tackling all these challenges. It has a dynamic economy that is on track to attract $20 billion in inward investment this year. It is already a major transit country for oil and gas and is set to be a crucial energy corridor into Europe. It has a network of relationships with countries in the middle east, including Syria and Iran, which no current EU member state can match. It has a young and increasingly educated work force, and larger armed forces than any other European country. It has shown that it can deliver real successes, working with us, on tackling terrorism, organised crime, illegal migration and trafficking. Perhaps most of all, at a time when some people are peddling the idea of an inevitable clash of civilisations, it is an immensely powerful symbol that European values can be Muslim values and vice versa.

Gisela Stuart: My right hon. Friend is right that we must find a way of bringing the former states of Yugoslavia into the Union, and that for strategic reasons we must find a way of bringing Turkey in, but that will require some rethinking about the disproportionate powers thatwere given to smaller countries in the European Union, such as a minimum of four MEPs and their own Commissioner. Is some thought being given to how a European Union of 30-plus member states, including Turkey, would look in terms of power balance?

Margaret Beckett: I am sure a great deal of thinking is going on in many member states. The difficulty is that it does not necessarily seem to be coming to the same conclusion in every case. It is a task which, I am happy to say, will be before other presidencies, not ours.

Several hon. Members: rose

Margaret Beckett: I shall give way for the final time, then I must make progress.

Daniel Kawczynski: I am grateful to the Foreign Secretary. She mentioned illegal immigration. Many Maltese MPs have told me that their country is being swamped by illegal immigrants from north Africa, particularly from Libya, and cannot cope. What plans does the right hon. Lady have to help our strategic ally in the Mediterranean to cope with the vast numbers coming over?

Margaret Beckett: Although the hon. Gentleman is right to identify some of the problems that Malta is facing, those problems are faced by countries across the whole of southern Europe. The only way to tackle such problems is to stimulate and support the kind of co-operation that all those countries seek, and to look at those problems in the round. They are all affected by similar problems, although the details may not be quite the same.

Geoffrey Clifton-Brown: Will the Foreign Secretary give way?

Margaret Beckett: I will, but then I must finish.

Geoffrey Clifton-Brown: I am grateful to the Foreign Secretary for giving way. Some people believe that the outcome of the situation in Iraq will be the federation or even the break-up of Iraq. That would involve a Kurd problem, which would give Turkey very considerable problems indeed and make its accession to the EU even more difficult. Can I take it, therefore, that the British Government will oppose any break-up of Iraq?

Margaret Beckett: The Government have always opposed the notion that the break-up of Iraq would be in the interests of Iraq or of other states in the region. Indeed, we believe it could cause substantial problems, and there are many people in Iraq who share that view.
	There is an argument that says that since we are already working so well with many of the countries that still want to join the EU, we do not need to follow through on our promises of enlargement or the prospect of enlargement. That seems to me to be both a dangerous and an incredibly short-sighted argument. We should not kid ourselves. The foundation of the extraordinary soft power of the EU to which I referred earlier, and the reason why, more than any other international organisation, it has transformed the world around it, has been the prospect of full membership. In the case of Turkey or Croatia, offering them anything else at this stage would be to go back on our word. For other countries, if we want to encourage them down the right road which is in their interests and ours, we cannot rule out that ultimate destination.
	The main story at the European Council next week will almost certainly be enlargement. European leaders can choose to keep the door open to their neighbours, fulfilling our promises, helping those countries to continue political and economic reforms, and stressing the need for them to meet strict conditions and obligations. Over a period of time we could draw these strategically vital countries ever closer until they were in a position to become members of the European Union, or we could push them away. The Government are clear which is the direction in which Europe must go. That is the message that we will be taking, with, I think and hope, the full support of the House to Brussels next week.

Graham Brady: We join the Foreign Secretary in her comments about the importance of enlargement and in hoping for new impetus to achieve the necessary improvements in the emissions trading scheme and for developmentin Africa. We also strongly support the broad thrustof her comments about the positive results that enlargement has brought to so many member states joining the European Union.
	This EU affairs debate comes at a critical time in the development of the European Union and the position of the member states within it. A year and a half after the French and the Dutch rejected the proposed constitution, we are approaching what was supposed to be the crescendo of a massive national debate about the future of the EUa debate that the Government promised to lead. Instead, in the words of the European Scrutiny Committee
	the Government's general position appears to be to shelter behind the obvious absence of any consensus on the future of Europe and to say that it will inform the House of its views once there is one.
	Meanwhile, the German Government are preparing to try to salvage as much of the constitution as possible during their forthcoming EU presidency. French politicians are talking about a mini-treaty that would similarly increase the powers of the EU, with an EU Foreign Minister, a permanent President and the surrender of national vetoes, but in the hope that approval could be slipped through in parliamentary votes without the need for further referendums.

Gisela Stuart: I agree that this is a critical time for the EU. Can the hon. Gentleman tell me when the leader of his party last met Members of the European Parliament in Brussels?

Graham Brady: The hon. Lady will not have to wait very long.
	As all this important discussion and debate about the future of the EU proceeds, our own Government have dithered and vacillated.

John Redwood: Does my hon. Friend agree that the emissions trading scheme in the EU has been grossly abused by some member states by over-issuing permits? That means that in Britain, which is short of permits, companies have to pay out good money over the exchanges to continental countries that are making a fortune out of undermining the whole purpose of the scheme.

Graham Brady: My right hon. Friend makes an important point. That is a good illustration of how the European Union does not necessarily always get things right and why it should focus on ensuring that it achieves what it can using current powers and existing treatiesdoing so properly and correctly instead of making ambitious proposals for new treaties and constitutions.
	When the Foreign Secretary was recently away in India, the press reported that the Minister for Europe, in what was described as a private speech, suggested that the Government would row in behind the kind of mini-treaty favoured by the French, signalling that further vetoes would be given up.

Geoff Hoon: indicated dissent.

Graham Brady: The Minister shakes his head. However, given that the Foreign Secretary has confirmed to me in a written answer that the right hon. Gentleman reports both to her and directly to the Prime Minister, we have to take such signals seriously. I hope that he will clarify the point when he winds up.
	We have had to wait with bated breath for any official indication of the Government's position on the future powers and shape of the European Union. Yesterday, the Minister finally issued a written statement setting out in very vague terms what he called
	the principles that will underpin
	the British contribution to the German presidency's consultations on the future of Europe. The statement tells us:
	We will...favour proposals that modernise the workings of the EU so that it is better equipped to meet both today's and future challenges.
	However, it does not tell us whether that means that the Government are preparing to support the constitution lite, or the slimmed-down mini-treaty, proposed by Mr. Sarkozy or Angela Merkel, with further extensions to qualified majority voting and an EU foreign minister. Perhaps the Foreign Secretary could tell us now, or the Minister could tell us when he winds up, exactly where the Government stand.

Ian Davidson: May I urge the hon. Gentleman not to read too much into statements made by the Minister for Europe when the Foreign Secretary is in India? After all, when the cat is away, other things get said.
	Does it remain the Opposition's position that they will call for a referendum on any mini-constitution that is proposed by the Commission?

Graham Brady: I am grateful to the hon. Gentleman. I am confident that the Minister for Europe is a man, not a mouse, even though he does not necessarily find such confidence on the Benches behind him. I am happy to give the assurance that it is our position that, were the Government to seek approval for a treaty that transferred further powers to the EU, we would indeed seek a referendum. I hope that the Government accept that it would be necessary to have the explicit support and approval of the British people.
	Crucially, if the Government are preparing to back a revised constitution, the Foreign Secretary should give an unequivocal assurancethe same assurance that I was just happy to give on behalf of the Oppositionthat it remains the Government's policy to hold a referendum to allow the British people to decide.

William Cash: Does my hon. Friend recall that Mr. Sarkozy, in his speech in September, advocated not only the creation of the post of an EU minister of foreign affairswhich would take us into extremely dangerous territory with regard to nuclear deterrence, among other thingsbut enhanced co-operation and a legal personality for the Union, thereby effectively endorsing the proposals that came out of the Convention? Does he agree that that would be wholly unacceptable?

Graham Brady: I do. Were that to be advocated by the Government, it should be allowed only with the support of the British people in a referendum, which, as my hon. Friend will agree, would not be forthcoming. We would both campaign against its being approved in such a referendum, as would, I hope, all Conservative Members and many Labour Members.

Graham Stuart: Will my hon. Friend give way?

Graham Brady: I will, although I am giving way a lot and should make more progress.

Graham Stuart: My hon. Friend is a great negotiator and someone who can bring peace to troubled relationships. For the benefit of our foreign negotiations, I propose that he should lead a delegation to the Minister of Europe and the Secretary of State to ensure that they become more closely acquainted, and perhaps even sit together instead of a yard apart in future debates.

Graham Brady: My hon. Friend makes his point. I think that they are getting on a little better todayalmost as well as Michael Portillo and the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) when they sit on the sofa together, but not quite.
	The Foreign Secretary says that the constitutional and institutional future of Europe will not feature on the agenda of the Council that is approaching. Would it not be wise, however, for the Government to set out our position clearly prior to the start of the German presidency, so that we can try to influence the shape that those discussions will take when the presidency begins?
	The unresolved institutional debate is the backdrop to a Council agenda that includes some vital questions for the EU to address. On these Benches, as the Foreign Secretary was good enough to acknowledge, we have always been stalwart supporters of EU enlargement. We believe that the support and nurturing of new democracies, whether in southern or in central and eastern Europe, has perhaps been the most positive contribution that the EU has made. The Foreign Secretary spoke about the important strides forward that have already been taken by Bulgaria and Romania, while indicating that further progress is needed. The Council will rightly welcome the accession of Bulgaria and Romania, but it will do so at a time when the future enlargement of the EU is more controversial than it has ever been.
	In this country, both the major parties have recognised the importance of encouraging Turkey to look to the west and the role that the process of EU accession could play in achieving that. Indeed, the opening of Turkish accession talks was perhaps the only significant achievement of the last British presidency of the EU, and we gave the Government full credit for that. We share the Foreign Secretary's view that the decision to suspend so many chapters of the accession negotiations is regrettable and is a major setback. It is essential that more progress should be made towards achieving normal relations between Turkey and Cyprus, but it is surely the case that the prospect and process of EU accession is an important lever to help to achieve that endas it would be for further improvements in democracy and freedom in Turkey.
	We also hope to see continuing progress in relation to Croatia and the western Balkans, and real efforts to improve co-operation with and support for neighbours of the EU in Ukraine, Belarus and beyond.

Keith Vaz: rose

Graham Brady: I happily give way to the former Minister for Europe.

Keith Vaz: I am most grateful to the shadow Minister for Europe.
	The hon. Gentleman re-emphasises that the Conservatives are in favour of enlargement. Will he take this opportunity to distance his party from the tasteless articles in the tabloid press criticising citizens from EU countries who seek to exercise their legitimate right to come here to work, with constant monitoring of how many Polish babies are being born? Surely, if we believe in enlargement those citizens should come here, exercising their rights under the appropriate treaties.

Graham Brady: My central heating boiler has just broken down, so I will happily join the right hon. Gentleman in welcoming an influx of plumbers into the countrythey are much needed.
	I agree with the Foreign Secretary's general comments about the importance of enlargement, but there are those who are trying to tie future enlargement of the EU to acceptance of a constitution that has already been rejected by the electorate of two major EU nations, and which the Home Secretary described on Monday as deceased, a dead parrot. It was therefore heartening to hear the Foreign Secretary making clear on The Westminster Hour this week her view that institutional reform is not essential. She said: Some of thisdecision-making
	could become more difficult but it would be too much to say that we're not coping at the moment.
	She went on to say that things are not too bad. When the Minister winds up, will he put the Government's view on the record and confirm that they do not regard institutional reform as essential and that they will continue to support the further enlargement that the Foreign Secretary and I agree is desirable, regardless of institutional change? That is contrary to the view that he expressed in his speech at the Institute for European Affairs in Dublin on 20 November 2006, when he said:
	The current rules are unsustainable in a European Union of 25 stateslet alone 27 or more.
	As the Foreign Secretary said, the Council will also tackle the controversial issue of EU involvement in decisions relating to justice, home affairs and immigration, and consider
	progress achieved in implementing The Hague Programme.
	We believe that those matters are fundamental to national sovereignty. We agree with the Irish Minister for Justice, Equality and Law Reform, Michael McDowell, who said so clearly in the  Financial Times on 23 September:
	The whole criminal justice area is an area of national sovereignty in which there are huge sensitivities.
	He set out a more practical, alternative approach, which Ministers here would do well to follow. He said:
	My vision for Europe is that instead of constantly seeking to enlarge the competence of the union, that the justice and home affairs ministers should concentrate on practical measures of co-operation between states to enhance security and combat terrorism.
	As recently as last Thursday, when the House debated an EU Scrutiny Committee report, the British Government appeared incapable of setting out even their own position, insisting on leaving open the possibility of using the so-called passerelle. The Under-Secretary of State for the Home Department, the hon. Member for Enfield, North (Joan Ryan), said that the Government's position was clear and that there was a debate to be had. The Government's preferred outcome for that debate was unclear. However, after the meeting of the Home Affairs Council, the Home Secretary pronounced:
	There's a clear and probably overwhelming majority against
	giving up the veto. He continued:
	That's our view ... We should not by using weasel words attempt to revisit this at a higher level when there's such a clear majority.
	Will the Minister for Europe confirm for the first time that the Government now regard the matter as closed and that they do not want proposals for surrendering the veto over justice and home affairs to be
	revisited at a higher level
	at next week's summit?
	The Foreign Secretary said that discussions would focus on immigration. Obviously, the Commission's forthcoming report will be on the agenda. Will the Minister for Europe give a little more insight into the Government's thinking? Will he state categorically, following the difficulties of recent years, that the Government's priority now is to reassert control over our borders and that, as far as the UK is concerned, border control will not become a shared competence?
	Will the right hon. Gentleman tell the House whether the UK will oppose Commissioner Frattini's proposals for a comprehensive migration policy for the EU? Will the Government confirm that the proposed EU-wide criminal offence of employing irregular migrants is one of the first attempts by the EU to create criminal law using qualified majority voting, following the controversial ruling of the European Court of Justice last September?

Kelvin Hopkins: Does the hon. Gentleman agree that one of the defining characteristics of a democratic, independent nation state is a border, which is defensible and under the control of that nation state?

Graham Brady: Absolutely. That is why I am delighted to have the hon. Gentleman's support for our proposition that we should maintain control over our borders.
	As winter sets in across the continent, the Council will examine ways in which we can work together to guarantee security of energy supply. That is naturally a matter of the highest concern for countries that are wholly dependent on gas from a single source, but, last winter, the UK also suffered unprecedented problems. In our case, they were a clear demonstration of how far short we continue to be of a proper and efficiently working single market in energy. The Commission has a massive programme of work to ensure that all EU customers, including British customers, are treated equally, that all EU companies, including British ones, can compete equally and that EU member states do not use fears of energy insecurity as an excuse to distort markets by creating so-called national champions. That is a big agenda for the European Commission. Attempts to add new competences instead of making proper use of existing ones are an absurd diversion. For example, the proposal for a single European energy market regulator should be rejected.
	We must also retain flexibility on third-party agreements. It is desirable for EU countries to work out a common position on specific energy suppliers, but there are other energy suppliersfor example, Norwayoutside the EU, on which a common position is unnecessary. Overall, we need a pragmatic, market-oriented approach, the main goal of which is the results that customers and businesses want, not the aggrandisement of EU institutions.

Daniel Kawczynski: My hon. Friend intimates that there should be closer co-operation in the EU on energy. Countries in eastern Europe, such as Poland, are frustrated by Germany building an underwater pipeline in the Baltic sea from Russia to Germany. It is a disgrace and contradicts the spirit of a common EU policy on energy.

Graham Brady: I am aware of the concern caused in the Baltic states, including Poland, by that decision. It shows how all member states could reflect more on co-operating freely to achieve the desired outcomes. Perhaps it is unusual to criticise the Germans for not being as communautaire as they might, but the decision that my hon. Friend cites is, perhaps, an example of it.
	Energy, enlargement and the future institutional arrangements of the EU are all important, but the gaping hole in the Council agenda is an assessment of the Lisbon agenda and the massive competitive challenges that face the EU. We are 60 per cent of the way through the period that was meant to witness the EU emerge phoenix-like as the world's most competitive knowledge-based economy. Not only has no progress been made, but we are moving backwards.
	Britain's opt-out from the working time directive is under threat, and on 23 November the  Financial Times reported:
	Business fears new wave of EU labour regulation
	in the wake of a new EU Green Paper on Flexibility and Security in the workplace. Meanwhile, the City of Londonone of this country's most successful business sectors, which has welcomed the prospect of a genuine single market for financial servicesis increasingly worried that the implementation of new rules will damage its international competitiveness.
	With estimates that the financial services action plan might cost the UK more than 23 billion in the years to 2010, Michael Spencer of ICAP said:
	It would be a tragedy if over-regulation from the EU blows it for London, just at the point when the City has a shot at overtaking New York. Far too much of the FSAP has ended up being about protecting inefficient players elsewhere in Europe, rather than really opening up markets.
	A similar sentiment was expressed by the head of investment at Schroder Investment Management, who said:
	Several other member states seemed to be more concerned about protecting themselves from competition within Europe rather than focusing on the increasing competition we are experiencing from the rest of the world.
	The paradox is that the scale of the competitive threat to European economies is almost universally acceptedby the Commission, member states, businesses and the public. When  The Economist produced its excellent analysis of the economic problems that France faces, with the cover showing Lady Thatcher against the background of the French flag and the banner headline, What France Needs, the editor John Micklethwait tells me that 24,000 copies sold on news stands in Francemore than four times the normal number. Yet month after month, year after year, we continue to slide in the wrong direction while other world economies surge ahead.

Keith Vaz: I am grateful to the hon. Gentleman for giving way a second time. He is right to raise the Lisbon agenda, even though it does not feature toany great extent in the schedule for the discussions on 14-15 December. However, does he accept that Britain is a good performer on the Lisbon benchmarks? We are the fourth best performer in Europe. The problem is convincing our colleagues and partners in Europe that the benchmarks must be adhered to, otherwise we will never fulfil the good vision that was behind fashioning the agenda.

Graham Brady: The right hon. Gentleman is right that that is one problem that we face. However, the other is the danger that additional regulation will damage Britain's competitive position and stop our good performance. We must guard against that as well as trying to ensure that the Lisbon agenda is achieved throughout the rest of the EU. On that, as on so much, the United Kingdom could and should offer a lead to Europe, but does not.
	While the British Government have wobbled and equivocated, other member states have been busy either ratifying the EU constitution, as Finland did yesterday, or pressing on with other ways of increasing the EU's powers. At a time of uncertainty and turmoil for the EU, the British Government have wasted an historic opportunity to lead the process of reform that is needed if the EU is to compete and prosper in future. The member states that are looking to Britain for leadership towards a more flexible, less regulated, more free-trading EU have seen instead a Government who are paralysed by their lack of vision and afraid to listen to the views of their own people.

Geoff Hoon: Will the hon. Gentleman give way?

Graham Brady: No, I will not. I am coming to the end of my speech.
	Next week's summit is an opportunity for the Prime Minister to rediscover the reforming zeal that he displayed when he addressed the European Parliament at the beginning of the British presidency of the EU last year. The longer the EU is forced to wait for the leadership that it needs, the harder it will be to achieve the necessary change. We hope that the Prime Minister will have something of substance to report to the House when he makes his statement on 18 December, but the indications so far do not augur well.

Keith Vaz: It is always a pleasure

Mr. Deputy Speaker: Order. I apologise to the right hon. Gentleman, but I should at this point announce to the House that Mr. Speaker has placed a 15-minute limit on Back-Bench contributions, which applies from the right hon. Gentleman's speech.

Keith Vaz: Thank you, Mr. Deputy Speaker. I do not know whether I can count that as an intervention on my speech. That would prolong the 15 minutes, although I do not intend to speak for that long.
	It is always a pleasure to follow the shadow Minister for Europe, the hon. Member for Altrincham and Sale, West (Mr. Brady), but I noticed that he would not give way in order to hear what the Minister for Europe had to say, so we shall have to wait until 6.30 pm to hear my right hon. Friend's riposte. It is always good to participate in these debates and to hear what the Foreign Secretary has to say about the forthcoming agenda of the European Council. I do not think that we received an explanation of where the right hon. Member for Richmond, Yorks (Mr. Hague), the shadow Foreign Secretary, is this afternoon. It is customary, when the Foreign Secretary speaks from the Dispatch Box, for the lead Opposition spokesman also to be here, although we are very grateful that the hon. Member for Altrincham and Sale, West is in his place.

Graham Brady: I am grateful to the right hon. Gentleman for allowing me to put on record that my right hon. Friend is in Pakistan at the moment, undertaking an important engagement which I am sure the right hon. Gentleman, a former Minister for Europe, will accept ought to continue.

Keith Vaz: I am sure that the right hon. Gentleman will have a great time there.
	I find it fascinating, as I always do when I attend these usual suspects debates, that Opposition spokespersonswhether it be the right hon. Member for Richmond, Yorks or the hon. Member for Altrincham and Sale, Westspend at least half their speech talking about the European constitution. That is not a subject for consideration at the forthcoming meeting. The hon. Member for Altrincham and Sale, West will have heard the Foreign Secretary say that the paramount story that is likely to come out of the meeting in Brussels is the process of enlargement. Although we have heard a recommitment by the Conservatives to supporting enlargement, it is not long since they sought a referendum on the Nice treaty in order to block the enlargement that led to the entry of the A8 countries. That would have been the effect of such a referendum.

Graham Brady: I am sure that the right hon. Gentleman cannot be serious. Given that the Foreign Secretary has made it clear that she does not believe that we need institutional reform to accommodate 27 or more EU member states, the right hon. Gentleman cannot seriously believe that a referendum on the Nice treaty would have prevented further enlargement at that time.

Keith Vaz: Of course it would have. If such a referendum had gone against the admission of those countries, they would not have been allowed to come in. That is why the Nice treaty was raised in that way.
	There are three issues that I want to discuss this afternoon. The first is enlargement. I am glad that Britain remains a champion of enlargement, and I am full of praise for the work of the Foreign Secretary and of my right hon. Friend the Minister for Europe in pushing forward the enlargement agenda. They are right to recommit themselves to the entry of Turkey as soon as possible, although there are many obstacles to be overcome. The Cyprus question has to be sorted out, and there are other issues that Turkey needs to address. However, the support of the United Kingdom and the constant reference by the Prime Minister, the Foreign Secretary and the Minister for Europe to Britain's wanting Turkey to join the EU helps to make the case for Turkey. I hope that we will be at the forefront of that debate during next week's discussions. I also hope that, as a country with historic investment in and historic ties to Cyprus, we will do our best to help to deal with any problems that need to be solved. Without Britain's support, Turkey would never have become a candidate country. We therefore need to ensure that we push that agenda forward.
	We also need to remind the public and the tabloid press how important enlargement has been. When I mentioned the accession of the A8 countries, the hon. Member for Altrincham and Sale, West talked about the need to get his plumbing system sorted out. I know that he was jokingalthough I am sorry if his plumbing system really is not workingbut the fact remains that the entry of the A8 was extremely important for Europe, for all the historic reasons that we have rehearsed many times in these debates. It was important because it united Europe again and created the largest single market in the world.
	I am glad that we did not impose restrictions on the citizens of the A8 countries to come and work here. The figures show that more eastern European migrants have gone to Germany than have come to the United Kingdom, even though they faced quite severe restrictions there. The entry of the A8 countriesand their citizens coming to work in our country, whether on a long-term or short-term basishas been good for their economies, good for Europe and extremely good for Britain. The sum of 300 million has been added to the Treasury's coffers thanks to the arrival of the A8 citizens, and we are very grateful to them for being able to contribute in that way. It means that we do not have a grey economy. We have a straight economy in which people who earn salaries when they come to this country pay their taxes and national insurance.
	That is why I am at odds with the Government's policy on Romania and Bulgaria, whose citizens will have the right from 1 January to come here, but not to work unless they meet certain criteria. That will place employers in an impossible position and put a huge burden on the operation of the immigration and nationality directorate. I am afraid that the policy will have to be reviewed. We read in the newspapers that my right hon. Friends the Minister for Europe and the Foreign Secretary were on the other side in this argument. I believe that they were right, and that the policy will have to be reviewed.

Gisela Stuart: May I put forward another argument concerning Romania and Bulgaria? By definition, the people who leave their own country are often the best, the brightest and those with the most get up and go. Cannot those countries ill afford to lose those people to the bright lights of other countries, and might not our policy in fact be doing them a favour?

Keith Vaz: I have great respect for my hon. Friend's knowledge of these subjects, and for all the work that she did on the European constitutional convention committee, but I think that she is wrong on this matter. It should not be for us to decide what is in the best interests of another nation. It is for us to be fair, and if we are fair to Poland and Hungary, we should be fair to Romania and Bulgaria. I have lost that argument, but in a year's time, the Government will have to review their policy, because it is totally unworkable. I say to my right hon. Friend the Minister for Europe, Carry on doing what you are doing on enlargement. Keep ensuring that we are able to have these discussions, and let us not give up our position as the champion of enlargement.

Kelvin Hopkins: Following the point made by my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart), with which I totally agree, is it not a fact that the Polish Government have expressed concern about the loss of the brightest and best from their society? They need those talents, but they are losing them to the richer, more developed areas of western Europe. Would not that problem be even more acute in poorer countries such as Romania and Bulgaria?

Keith Vaz: I understand where my hon. Friend is coming from, but I do not agree with him. Some people will remain in their own country, some will want to stay in the United Kingdom and some will want to go back, but it is for them to make that decision. It is not for British parliamentarians to decide where people from Poland should live, how long they should stay in this country or what effect they are having on their own country. It is legitimate for people to raise these issues, but it is not for us to make those decisions.

Ian Davidson: Will my right hon. Friend give way?

Keith Vaz: No, I will not, as I have given way a lot on that point.
	My second point is on institutional reform. The constitution will not be the major feature of the European Council meeting, but the hon. Member for Altrincham and Sale, West was right to raise the issuealthough not at such great length. The fact remains that we need to address such matters. The Government's position is absolutely right: there is no need to resurrect the constitution as, clearly, this country has no appetite for a referendum, and I do not think that that would be successful. The French electorate have put paid to the European constitution for a long while. It is now a matter of negotiation and discussions between Heads of Government in the normal way.
	On institutional reform, however, we need to keep the British flag flying, as we should also lead the reform agenda. It is right to remind the House of the Prime Minister's many speeches about Europe being more acceptable to the British people if it reforms itself. Clearly, it will not reform itself, so we must lead that reform. When Bulgaria and Romania become members, the EU will have 27 countries. I have attended European Council meetings, as have other right hon. and hon. Members present. It will be impossible to get decisions made at such meetings with 27 Foreign Ministers,27 Prime Ministers and 27 Europe Ministersalong with all the Commissionerssitting round the table putting their countries' positions.
	I therefore say to my right hon. Friend the Minister for Europe that if we need to move ahead in areas in which co-operation is possible, when that is in the national interest, we should do so, as long as it does not result in the need for treaty changesif it does, obviously, it is a great constitutional issue. If the practicalities of the way in which Europe is governed are at issue, we must go ahead. We cannot leave the European Union in a position in which decisions cannot be made and the organisation is paralysed.
	That leads me to the issue of the Tampere agenda, which was agreed in 1999 and has now become The Hague formulanamed after the city, not the right hon. Member for Richmond, Yorks, who is in Pakistanwhich is the agenda for justice and home affairs. Of what are we afraid? Surely we are in favour of controlling illegal migration, dealing with the drugs barons and controlling the trafficking of people. Of course we need to move forward on that agenda with our European partners. It would be astonishing if our security forces, the police and other agencies would not work in concert with the police, Interpol and the security services of other countries to deal with those three issues. What have people got against co-operation on that line?
	I have no problem with giving up the veto on those issues. In majority voting, we are always on the winning side. The Conservative Government gave up the veto and allowed us qualified majority voting more than any other Government in the history of this country. Under them, the veto disappeared out of the window on whole areas of policy. I have no problem with QMV in justice and home affairs. In this day and age and in this climate, it is vital that we are able to co-operate with our European partners. I will take the judgment of Ministers on that, however, as they are in possession of the information, and they know whether it is right to do so. There is the argumentif the hon. Member for Altrincham and Sale, West looks at the figures on the number of times that we are on the winning side on QMV, he will be amazed at the statistics.
	My final point is on the Lisbon agenda, which was correctly raised by the hon. Member for Altrincham and Sale, West, but, sadly, is not a matter that will occupy those in Brussels on 14 and 15 December. To my mind, it is the crucial agenda that Europe should follow. On the day of the pre-Budget report, it is important that we pause briefly to emphasise the importance of the Lisbon European Council, which was different from any other such meeting, as for the first time it set out strict and legitimate benchmarks against which countries are to be judged. The hon. Gentleman has an engaging smile, and when I asked him about our performance, he smiled. In fact, our performance is the best of the big countries in the European Union, thanks to the stewardship of my right hon. Friend the Chancellor of the Exchequer. On the Lisbon agenda, we are the fourth best performer in Europe, Germany is 10th and France is eighth. On practically every one of the targets, especially the employment targets, we are well ahead of our European competitors. It was the Economic Secretary to the Treasury, who ensured, while he was in Tokyo, that the derogation was agreed with Brussels so that we remain the financial capital of the world and keep New York at a far distance.

William Cash: Surely the right hon. Gentleman must take account of the fact that the Labour party in opposition was completely in favour of monetary union, in principle and otherwise, and of the exchange rate mechanism. It is precisely because we are out of both of those that our economy is having relative success. That is a question with which the current Chancellor of the Exchequer will have to contend when he becomes Prime Minister.

Keith Vaz: We are in such a strong position, as we have heard from the Chancellor today, because of the polices of this Government and the stewardship of the Chancellor. Let us not get into a long debate about how economic policies compare.
	Please will my right hon. Friend the Minister for Europe ensure that he pushes the Lisbon agenda forward in discussions? We waited for and received the mid-term reportthe Kok reportwhich was published in 2005, and which made sorry reading. Europe's economy will not be the most dynamic in the world unless it can meet the Lisbon benchmarks, and we cannot wait for five years to find out about that. I know that the issue was pushed forward in a meeting of Finance Ministers on4 December to discuss innovation. We need to push the Lisbon agenda forward at all times, as it is the only way in which we will make a difference to Europe's economy.
	I wish my right hon. Friend the Minister for Europe well in pursuing the agendas set out so well by the Foreign Secretary today. In doing so, he has my support and, I think, the support of the vast majority of Members of the House.

Michael Moore: I draw the attention of the House to my entry in the Register of Members' Interests.
	This debate has certain traditions, one of which for me is to follow the right hon. Member for Leicester, East (Keith Vaz). It is a pleasure to do so, as he has spoken a lot of good sense about the issues facing Europe. The debate also always has a slightly surreal quality, which has been honoured by the references to plumbing and the idea that the Eurovision song contest is setting the agenda for enlargement. Thankfully, a lot of serious points have also been made, which the subject of Europe surely merits.
	Two weeks ago, two important speeches were made on the same day about the future of Europe. Each, however, said different things. One was made by the Foreign Secretary, who was addressing European Union ambassadors to the United Kingdom at the Finnish embassy in London. The other was made by the Minister for Europe, who was addressing the Institute of European Affairs in Dublin. Of course, the differences in the speeches might be viewed as the latest twist in the soap opera of King Charles street, which has been entertaining some and depressing the rest of us in recent months. On that occasion, however, the differences were not about splitsat least not on the surface.
	The Foreign Secretary's speech dwelt on the challenges of climate change and energy security, the increasing complexity of Europe's external relations and the importance of common responses to the threats posed by international terrorism, and touched on the desperate need to make progress on the Doha trade round and to tackle the desperate situation in Darfur. The Minister for Europe's speech focused on the historic recent enlargement of the Union, the opportunities offered by the growth of the single market, and the need to reform Europe's institutions if we are to make the most of Europe's potential.
	Whatever the differences on the Treasury Bench, one does not need to be too charitable to acknowledge that the two different speeches underline the sheer breadth of issues confronting the United Kingdom and our European partners, and the importance of ensuring that, as a country, we are committed players in a growing European Union.
	The recent mood has been downbeat, and it is proving hard to shrug it off. We have had a somewhat muted and low-key 12 months since the rejection of the constitution by France and the Netherlands. Finland acceded to the presidency with high hopes of re-energising the Union, bringing the passive period of reflection on the constitutional treaty to a close, and starting active discussions on the future of the treaty; but, with recent inconclusive elections in the Netherlands and French presidential elections in 2007, it is not surprising that the issue has barely been discussed by European leaders, openly at least.
	We believe that recent and planned enlargement will place further pressure on Europe, which will force further reform of the institutions. Only yesterday, as mentioned by the hon. Member for Altrinchamand Sale, West (Mr. Brady), Finland became the16th country to ratify the draft constitution. Perhaps that was a belated attempt to restart negotiations on the treaty; but whatever the reasons for the ratification and whatever Finland hopes to achieve by it, it is clear that the review of the constitutional process as it stands is virtually moribund and in need of a fresh start.

Kelvin Hopkins: The hon. Gentleman mentioned Finland. Some years ago I asked a Finnish journalist why Finland did not hold a referendum on these matters. The journalist said, We could not hold a referendum: the people would not vote the right way.

Michael Moore: That was an unfortunate and cynical calculation. Perhaps similar thoughts have crossed politicians' minds in this country in recent years.
	It is important for us not to concentrate on examining our constitutional navels. Europe must not lose sight of the need to address the delivery deficit which directly affects all the people of Europe. That means refocusing on the economic weaknesses that the Lisbon and Hampton Court agendas have sought to address, and, in the wake of the stark warnings in the Stern report, on tackling the urgent issue of climate change. Whatever the disappointments of the past six months, we should not blame the Finnish presidency, which for the most part has been left to deal with more immediate, although none the less important, issues. In particular, the issue of Turkish membership of the European Union has continued to be a key challenge for Europe, and controversy continues to be inextricably linked to the issue.
	The twin issues of relations with Cyprus and fundamental internal reforms continue to provide barriers to a smooth accession process, but those barriers must not come to be regarded as insurmountable. Turkey will have to open its ports and airports to Cypriot traffic, and further moves towards settling the Cyprus dispute are clearly a prerequisite for Turkish accession, as are measures to tackle the shocking human rights issues in the country. However, it is important that we reinforce our commitment to Turkish accession to the European Union. There ought to be no ideological ordespite what some may try to assertreligious barriers to Turkish membership of the Union. The issue of Turkish accession may prove to be the most difficult of the enlargements that Europe has undergone, but in the end a reformed, democratic Turkey will be stronger, and at the same time will strengthen the European Union. It must be worth the effort.
	Of course, the issue of Turkish membership is not the only matter of enlargement with which we are concerned. The enlargement process must continue in the Balkans, and we must reject any idea that the Union's absorption capacity precludes any further members from south-east Europe. The Balkans are a hugely important part of our continent and we are all affected by what happens there, as was demonstrated so disastrously in the 1990s. The legacy of those conflicts is still with us in Kosovo and Serbia, where the fragile state of affairs is testimony to the difficulties of overcoming conflict.
	The coming year will be important for Kosovo and Serbia, and we must hope that the Council will address these matters. There will be elections in Serbia in January, and the results of Kosovo's final-status process are expected shortly thereafter. It is important for Britain to speak strongly on the issue. Serbia's recent reassertion of its territorial claim to Kosovo means that there are tough times ahead for the region, but some form of internationally guaranteed independence for Kosovo is inevitable and vital. Serbia and its neighbours must recognise that. Moreover, all the aspirant countries in the region must recognise their continuing obligations to satisfy international demands relating to the war crimes committed during the bloody conflict of a decade ago.
	A strong approach is essential, but it is also crucial that the Union continues to offer the carrot of membership to the region as the countries continue to undergo the difficult process of recovery and reconciliation. Accession and its economic and political benefits remain an important prospective reward for the difficult choices and the work involved. For the Union, it will represent the chance finally to unite all the different corners of Europe in a peaceful and prosperous continent, and the hope of burying the terrible legacy of Europe's 20th-century conflicts in the process.
	Despite its aspirations, the European Union's external relations have at times been fragmented and haphazard in recent years, not least owing to the divisions caused by the Iraq war. Increasingly, however, it is becoming apparent in both Europe and Washington that European involvement is a crucial component of international affairs. We therefore need to develop Europe's capability in its external relations policy. That requires difficult choices on the part of member state Governments, not least the British Government. We need to rebalance our British foreign policy, away from dependence on taking Washington's lead and towards greater influence within Europe. Nowhere is that more apparent than in the middle east, where the United Kingdom appears to have been completely bypassed by the recent Spanish, French and Italian peace initiative. Current international policy towards Israel-Palestine is in danger of irreversible failure, and we need a serious rethinking of that policy if we are to see a solution.
	Europe has an important role in the region, and in resolving that conflict. The EU is the largest aid donor to the Palestinians. In 2005 it gave 500 million, and the figure for 2006 is expected to be even higher. In Lebanon, too, Europe is a key donor, pledging100 million following the disastrous conflict earlier this year. The Union also has an important economic relationship with Israel through the association agreement. We are Israel's largest trading partner, representing 35 per cent. of its tradea full 10 per cent. more than its trade with the United States.
	Europe therefore has the motive, which is the crisis in our neighbourhood, and the means, which is our economic influence in the region, to play a greater role. For too long we have been the banker for a failed international approach to the conflict, providing hundreds of millions of pounds to rebuild what has just been destroyed in the most recent confrontation. That money, rather than genuinely developing Palestine and Israel by reversing their descent into poverty, is in essence paying the cost of each failed military action.
	The Franco-Spanish initiative was welcome and served to remind us how far removed we are from the road map, but it did not set out a new strategy, and without support from countries across the Unionincluding Britainit is likely to become just another failed initiative. What we need is a new common European position on Israel-Palestine, and such an approach must continue to be based on the Quartet's principles to create a secure and stable state for both Israel and Palestine. Europe must use its economic and geographic influence, backed up by a willingness to be part of the necessary security measures, to ensure that we get a proper and sustainable peace in the region. Unilateral UK efforts or trilateral European efforts are unlikely to succeed. The European Union is the formal member of the Quartet; it must act in accordance with that fact, and not simply continue to bankroll an increasingly failed policy over which it has limited influence.
	There must also be a new strategy on Russia. The current approach is clearly insufficient. We in Britain are currently rightly concerned about the events surrounding the death of Mr. Litvinenko. We welcome the statements of the Foreign Secretary and Home Secretary that diplomatic protocols will not be a bar to a full and thorough investigation, but there must be some concern following Russian statements that there will be no extradition of any suspects to the United Kingdom and severe limitations on the work carried out by Scotland Yard detectives in Russia. We must of course be careful not to point the finger of blame at Russia itself, but the Russian authorities must also recognise Britain's legitimate need to investigate Mr. Litvinenko's death without hindrance.

Doug Henderson: It sounds a bit like the hon. Gentleman is adopting a moral position on this issue. There is no extradition rule between Britain and Russia, and Britain has refused a large number of requests for extradition of people who do not wish to return to Russia. Therefore, the Russians are just adopting the current protocol.

Michael Moore: Let me reassure the hon. Gentleman that I was seeking to make neither a moral nor an institutional observation. However, an apparently friendly Government ought to be willing to go the extra mile in a set of circumstances where there are legitimate concerns here in Britain to find out what has gone on in relation to that death.
	There are valid concerns about many of the policies that Russia is following. Sadly, in recent times, criticism has been at best muted and at timesthe worst casenon-existent. Such an approach allows the Russian authorities to divide and conquer in negotiations with Europe. That is clearly disadvantaging us, and it is particularly unacceptable as Europe ought to be in a strong position.
	Recently, there has been much focus on the energy relationship. Europe does indeed need Russian oil and gas supplies, but Russia is also very dependent on a European market that is willing to pay what remain high prices for those supplies. It is dependent on Europe in many other ways toonot that that is always obvious from the way that the EU reacts.
	The EU is undertaking negotiations with Russia on a successor agreement to the partnership and co-operation agreement. The original statement included strong references to the need to respect political and economic freedoms. Any successor agreement must also include strong commitments to human rights, democracy and the rule of law, but, more than that, Europe must be willing to hold Russia to those commitments. It must also be made clear that its actions in Georgia, Ukraine and Moldovato name but a few placesare totally unacceptable. Moreover, if Russia wants European support for its aim of accession to the World Trade Organisation it should be made explicit that that support depends on its abiding by the international rule of law. The future of Russia is in the balance, and the people of Russia and those in European Union will be ill-served by Europe remaining divided in its handling of Russia's affairs at home and abroad.
	There are many different visions of, and for, Europe, and when the Heads of State and Government gather next week they will no doubt reflect that Europe remains in a state of flux. They represent a Europe that is still coming to terms with the dramatic enlargement of two and a half years ago, that is still to equip itself with the tools to do its job efficiently and effectively, and that has still to undertake essential, and possibly painful, reforms.
	For all the difficulties facing them, the leaders will be meeting at a significant moment. As the 50th anniversary of the treaty of Rome approaches, the EU has never been more important to the lives of people in the UK. The challenges might have changed, but the founding principles remain as relevant as ever.

Doug Henderson: It is a pleasure to follow the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore). In some ways, listening to, and taking part in, this debate is a bit like being at a meeting of the European Council: many issues are placed on the agenda, and rightly so, and everybody wants to have their say about all the various issues that are on the agenda, but only a limited number of issues ever come off the agenda with any decision having been made. It is another axiom of Council meetings that if someone wants something to be on the agenda in 24 months, they must raise it now or there will be no chance of it ever becoming an issue that is treated as a priority. It is therefore right that Members of this House are raising many issues that affect our future in Europe.
	In debates such as ours, it is often said that the usual suspects take partoften by making the usual suspects' speeches. Our debate today is not particularly different from those of other occasions, although I notice and welcome that a number of newer Conservative Members are quickly learning the tricks of usual suspicion. We look forward to their contributions.
	Inevitably, and as the Foreign Secretary said in her introductory speech, the main issue on the agenda, which will be taken off it following the decisions that will hopefully be taken next week, will be how we proceed with enlargement. Matters relating to Bulgaria and Romania, and to some of the other countries that have been mentioned today, will be discussed. It is very important to ensure that we get the Turkey situation right, and that we continue to argue a positive case. The very complicated position in the Balkans also needs to be sorted out over time.
	I would normally dwell on enlargement, as I have before in such debates, but today I want to be different. I want to put on the agenda an issue that, although it will not be top of the bill next week, will probably rise up the order of priorities come the June Council meeting and will become increasingly important in subsequent meetings: climate change. The European Union is often criticised on all sorts of grounds. Some of that criticism is friendly, and some of it not so. Whatever one thinks of the EU, I cannot imagine that any other body will hold together international talks on climate change. The United Nations will try and, in a sense, it will set the tone of what might be achievable, but to judge by history, it will not achieve it. Such aims will be achieved through negotiations between different interest blocs, who will sit down in a multilateral decision-making forum, whatever form that forum might take.
	That is exactly what happened at the Kyoto talks some years ago. The UN was unable to resolve the situation on its own, so there were talks among the different blocs and different commitments were made. It is not just a question of outlining a particular position; it is about being able to deliver on it. If the EU was not taking a very active role in climate change, how on earth would we deliver what we want to deliver in a European context? It would be extremely difficult, and I doubt whether we could. As the emissions trading scheme shows, even with the EU's involvement, it is not all plain sailing; there are many difficulties that we have to face up to. Without the EU's involvement, the situation would be almost impossible.
	Emissions trading is playing a key role in tackling the carbon reduction aims that are increasingly being pursued throughout the world. This is not an original EU ideait evolved following inter-state agreements within the United Statesbut the EU has driven it forward in a positive way. Some 18 months into the scheme, we are already seeing the progress that is being made. It is not perfect, however. As the right hon. Member for Wokingham (Mr. Redwood)he is no longer in his placepointed out in an intervention, there have been many somewhat dubious definitions of permits under the existing permit scheme. Such aspects of the scheme have to be tightened up, but essentially, it is sound. It sets carbon emission levels for different European nations and within different industries, and it provides a forum for examining what is happening and what needs to be done not only by nation states, but by the industrial and commercial sector. I cannot envisage a better forum for achieving that aim, which is why we must focus on it and build on what has already been achieved.
	A measure of marketisation is also the right approach. It is better if people have an incentive to do something sensible, rather than their being forced to do something that others believe to be sensible. That is why the incentive scheme is a good one. It encourages those who can make bigger gains than they are required to make to do so, and to trade them on. It also encourages those who find it extremely difficult in the shorter term to make such gains to buy the permit cover that they need to meet the European guidelines, if the other parts of their business allow them to do so. I think that the scheme is a good one, but the rules need to be examined and there must be a monitoring system, with the EU looking closely at what is happening in member states. If we start to wander from our commitment and targets, so will everyone else, and the scheme will fall to bits.
	However, the main challenge has to do with the future. The current emissions deals take us through to 2012. There is a European commitment to reduce carbon emissions by 8 per cent in that period, but whether we achieve those targets remains to be seen. How do we take things forward? How does the EU play its post-Kyoto role, looking forward to 2020 and beyond?
	Those key questions cover much of the territory covered by the recent Stern report. I know that the December Council meeting will not resolve them, but the Germans in particular are interested and there will be a lot of pressure to make real progress next May and in the Council meetings that follow.
	Another matter that needs to be reviewed on a regular basis is the scope of the emissions trading scheme. Which greenhouse gases should it cover? That question needs to be discussed in depth. Any EU agreement must be consistent with Kyoto, but nitrous oxide, for instance, is not included at the moment, even though it accounts for a significant amount of emissions. In addition, should gases emitted from coal, such as methane, be covered by a new emissions trading scheme? Other greenhouse gases are emitted from aluminium production plants. Their names are so complicated that I will not try to pronounce them, but should they be included in future?
	Those are big questions, and I shall be interested to hear what the Minister winding up the debate has to say in response. I also have various other questions that I want to ask.
	The UK has adopted a very radical approach to aviation. Our population accrues more air miles per person than just about any other in Europe, so any agreement is likely to hurt us a little. However, there would be a big gap in the new emissions trading scheme if it did not include aviation. I had thought that total emissions from aviation amounted to 2 or 3 per cent. of the European total, but my right hon. Friend the Chancellor said in his statement earlier that the proportion is now calculated at 6 per cent.
	A sector that accounts for so much in the way of emissions cannot be ignored, and that raises serious questions about how the EU will introduce controls on aviation. The matter could be dealt with relatively easily at a European level through fiscal measures, although I know that some Opposition Members might find that difficult. However, what is the positive alternative to air travel? How do we invest in a Europe-wide rail system whose emissions levels per passenger mile would be about one seventh of what is produced by aviation?
	I asked that question in my contribution to the Queen's Speech debate, but other questions are also important. For instance: how do we link up rail systems so that people can travel cheaply from any part of the EU to any other on fast trains? That would contribute to improving the environment but it would be a big, costly and challenging decision. Do Ministers accept that tackling the problems of aviation or vehicle travel in general raises questions to do with how we transfer the emphasis onto public transport in the European context? That is a difficult problem that cannot be resolved by single states acting alone.

Kelvin Hopkins: I strongly agree with my hon. Friend about the need to build a Europe-wide rail network. That is happening already, for freight in particular but for passengers as well, as a result of the initiative taken by our noble Friend Lord Kinnock when he was Transport Commissioner. However, does my hon. Friend agree that the lack of investment in this country's rail network, especially for freight, has always been a problem? As a result of it, the channel tunnel is almost bankrupt because so little traffic is going through.

Doug Henderson: I may not agree with everything that my hon. Friend says about European issues, but I agree with him on that point. He is right: we have not spent enough on rail investment and we need to spend more. Our system should connect with European networks and there should be a minimum investment figure for all EU countries.

Geoffrey Clifton-Brown: The hon. Gentleman has obviously thought about aviation sector emissions. Does he agree that if we are not careful and the EU imposes a duty on aviation fuel, there could be a huge distorting effect? We could suddenly find that Ryanair uses Moscow or Istanbul as its major refuelling depot. How could that result be overcome? Is it the best way to deal with the problem or would levying a further passenger duty be a better solution?

Doug Henderson: I fully accept the hon. Gentleman's point. Transport experts need to look into the problem. A diplomatic issue would be involved, too. If there was a bilateral agreement between Russia and the EU that any tax that applied in the EU would apply in Russia if an EU plane refuelled there, it would resolve the problem, although I realise that is a lot easier said than done. On the other hand, Ryanair might not find it viable to fuel up in Moscow to fly from Newcastle to Dublin. However, the problem needs to be tackled, as does competitiveness with the United States and north America. Should flights from that area be dealt with differently from flights within the EU? Those issues are all part of a package and they have to be resolved.
	I want to make two more points. First, the proposal to hold auctions for carbon limits is interesting and should be examined. I am not convinced that auctions would necessarily be better than the permit system, but it would be worth hearing the Government's view about whether they would be more effective, although if things were left completely to the market it would be harder for countries to define permits differently. I would not instinctively travel in that direction, but I shall be interested in the Government's view. Perhaps there could be a reference to that in the wind-up.
	Secondly, under the current system of emissions control permits, if an EU-based business invests in a carbon-saving scheme outside the EUfor example, in a developing country or in Chinatheir contribution counts in calculations under the EU rules. Although that provision is mildly imperialist, it has a lot of merit, because it reduces emissions worldwide. If, rather than emissions targets being reached only in a European context, they are reached both in Europe and beyond, there is an overall gain, and that is desirable.
	Earlier today, the Chancellor said that Britain had signed a partnership agreement on the development of biofuels with Brazil, Mozambique and South Africa, and that we are working on the preservation of rain forests with Latin America and Asian countries, on clean coal with China and India and on carbon storage with Norway. If EU businesses, particularly British businesses, currently invest in such projects, would that count against any limits set in the post-2012 agreements? The rules would obviously have to be EU rules, so can the EU make a forward agreement and would the British Government support it? If so, it would provide an incentive to go further towards meeting existing limits than is absolutely necessary from a statutory point of view. It could also be good business for many British companies that could make a contribution in that regard.
	I am sure that the meetings to be held next week will be similar to others that have taken place over many years. I understand that enlargement will be at the top of the agenda, and I welcome and support that, but I hope that the Government will feel able to push the climate change agenda. In the wind-up, it would be interesting if we could hear to what extent the Government accept the Commission's new proposals on emissions trading. Do the proposals go as far as the Government want, given that we were instrumental in pushing many of the issues?
	I wish our representativesbe they the Prime Minister, the Foreign Secretary, European Ministers or an array of civil servantsthe very best in the talks next week.

William Cash: As we approach the 50th anniversary of the treaty of Rome, I would like to take the opportunity of adopting a landscape view, sketching out some of the implications to reflect the situation as we now find it. First, I am bound to say that disarray among member states is apparent not just in respect of Iraq a few years ago when the situation became terminal for foreign policy and defence, but in respect of institutional changes as promulgated by proposals for a European constitution. We have had the referendums in France and the Netherlands, which went against the constitution, and a series of other rejected referendums in Denmark and Ireland, for example, that have been reorganisedwith a lot of threats and blackmailin order to get the right result. Of course, one cannot do that with a country like France. I am certain that it would not happen in this country either, as it would be so alien to the British tradition that serious problems would be caused.
	Just from sketching out those indicative problems, it is quite clear that the European Union is not working. I am interested in which way the future Prime Ministerthe present Chancellor of the Exchequeris likely to go on this subject. Above all else, he is a pragmatist. It is possible to make inferences from the people intimately around him, from his first statement on the Bank of England, from the economic tests, from the direction in which he has pitched his economic policies towards a more transatlantic approach and from the views of commentators such as Robert Peston and Tom Bower. They all provide some indication that under the presidency [Interruption.] That was a Freudian slip, as I meant the prime ministership of the current Chancellor. As I have made clear on several occasions, Conservative Members need to be aware that the Chancellor might do a mini-Peter Shore. My old friend, now Lord Shore, was a strong opponent of further integration. It would not be quite the same thing, but I believe that the direction is likely to be sceptical.
	I remember challenging the current Chancellor when he was the shadow Chancellor, accusing him of being in favour in principle of economic and monetary union. He said, Yes, I am, but then he said, and I happen to agree with your Chancellor of the Exchequernamely, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). Well, I think things have changed considerably since then and we need to be conscious of that change. I mention that because, fundamentally, any responsible Government have to look at the situation as it really isand it is not working: Europe is not working.
	We also need to reflect on what Europe affects. Despite the desire of many people to shove some of this under the carpet, the reality is that, the EU affects a vast amount of what goes on for our constituents. I challenge anyone to try to tell me anything that it does not affect. That is all driven by a harmonised legal system and majority voting.
	As I said in an intervention, the European Court of Justice carries with it a contradiction: in most cases people do not get what they would voluntarily want if they exercised their freedom of choice in the ballot box, by virtue of which they choose representatives in this Parliament, which legislates on their behalf. Yet we know perfectly well that, if hon. Members vote against a directive or a regulation in the European Standing Committee, which has happened on occasion, the decision is automatically overturned on the Floor of the House. The scrutiny process is wanting in many respects, and it is better than in most other member states.
	As I said in an intervention on the Foreign Secretary, the EU is undemocratic and unaccountable. There are ways to remedy that, and I need not rehearse my arguments on the supremacy of Parliament provisions that I proposed to the Legislative and Regulatory Reform Bill. I am very glad to say that Conservative Front Benchers and Whips agreed to support those provisions and went so far as to provide Tellers for what was a Back-Bench amendment, even though50 hon. Members had signed up to it on the amendment paper.
	My amendment was pursued as an anchor in that Bill, which ranges widely across a raft of measures and many Departments, and it was followed up in the House of Lords by a whipped vote, when the Chief Whip and the Leader of the Opposition in the Lords went through the Lobby with many of our noble Friends. Although we did not win the vote in either House, the anchor that those provisions representin sustaining the democratic principles on which Parliament is based is a matter for congratulation and applause for not only the Whips Office but the current leadershipprovided, of course, that that anchor remains firmly fixed where it was in June. I should not like to see it dragged in any direction, and I would strongly advise the leadership to include it in the manifesto, when it comes.
	I have taken this overall position both on the landscape and on the principle of parliamentary supremacy, which is an essential issue not only for the House but for Europe as a whole. In fact, I would go further and extend the landscape across the whole globe. Given that many people have an aspiration for the EU to operate on the scale of 450 million peoplein sophisticated, industrialised countries, with new countries coming in because of enlargement, it is clearly a matter of vast importance that the system is truly democratic and truly accountable, and it is not.
	I need not rehearse all the arguments or mention the European Court of Auditors reports, the failures of the European Commission periodically and the real problems that lie at the heart of the system, which needs to be reformed into an association of nation states. The system must be fully democratic, with co-operation where necessary, on the principle of subsidiaritywhatever that word means; it depends on whom one speaks toand it must operate in a way that genuinely allows freedom of speech and the freedom of markets to be determined by freedom of choice. That must lie at the heart of the democratic system. Accountability ultimately depends on that freedom of choice.

Kelvin Hopkins: I very strongly support the hon. Gentleman's emphasis on democracy. In reality, is not one of the reasons why the EU is not democratic the fact that the elites that run it are fearful that their citizens do not support what they are doing and might vote against them?

William Cash: I very much agree with the hon. Gentleman. It would be difficult to say that this is not a party political matter, but it is also right for me to say that this is a matter of such importance that it is essential that we have an understanding on both sides of the House about the importance of the principles that I have enunciated. I have demonstrated the lack of democracy and I could enlarge on that. There are so many instances of proof. It is a matter of overriding national interest that we get this right.
	I asked myself, Where are the problems and difficulties that arise? In the context of the system that now exists, they reside in most of the other member states. In Germany, for example, there has recently been a challenge to the European constitution through the German constitutional court, which has decided to put the matter to one side for the time being, because there are political questions that have yet to be resolved. However, the court did not suggest that it thought that the European constitution was consistent with the German constitution. In fact, I get the impression that it does not think that it is consistent, but it wants to put that on one side until the political questions are resolved during the course of the German presidency.
	What is the German presidency after? In my opinionI know that this is controversial, but I have said it beforethe German nation, in its own vital national interests, believes in a concentric circles plan. Michael Mertes, who devised the plan, had a clear idea of it. I discussed it with him at great length on a number of occasions. The indications are that, whether by design or otherwise, Germany would end up by having a disproportionate amount of dominance in a Europe dominated by the system of qualified majority voting. Those countries that are economically or politically dependent on Germany, which includes most of the new entrants, would be in a difficult position. How would they be able to vote against a country to which they were so deeply committed economically? I am not trying to evoke dark impressions of the past. I am saying that there is a realistic problem, which some people want to push under the carpet, but which has to be considered responsibly in this Parliament, which represents a system of democracy and accountability.
	We know that Chancellor Merkel intends to start the revival process in January. We understand that she wants a road map, leaving it to the subsequent presidency to take things forward. Apparently she is not optimistic about the German presidency solving the constitutional issue, but the fact is that she wants to kick-start the process. She is also against cherry-picking, or, in other words, taking bits and pieces, like Nicolas Sarkozy. She is against him on that. However, the reality is that underneath, there is a continuing commitment in Germany, in the Chancellery, to the idea of a European constitution and all the problems that will flow from it.
	There are two contenders for the presidency of France. One is Sgolne Royal. I happen to be a strong and fervent admirer of France. My father is buried there. He was killed in 1944, in the war, fighting for liberty. Sgolne Royal says that she does not want a two-speed Europe. However, in effect, she wants a hard-core Europe, relaunched with Germany, Italy and Spainso we are told. She has expressed considerable concern about the American influence. She says that it is possible to have treaties within the treaty among four nations. I say that she said that, but actually it was said on her behalf. However, I do not think that we can have any doubt about the interpretation of that. Mr. Savary, who is her spokesman, also said that goals should include convergence of tax and social security and that there would be talks on a European army, which would not replace national armies.
	So, we have a mixed picturein France, Germany, the Netherlands and elsewhere in the Nordic countries. It is not just a mixed picture, but a picture of confusion and uncertainty that makes the disintegration of the eurozone more likely. That will be driven by an implosion, with problems due to high unemployment of the kind that we have seen in Paris, Lyons, Hungary and elsewhere. The system will not work.
	This country has been denied a referendum. Apparently, the Prime Minister is in favour of the European treaty, but he will not bring forward another European Union Bill. He says that treaties cannot be implemented in part, but what kind of treaty will there be? People can look to the future against the background of the considerable differences that exist, such as Mr. Sarkozy suggesting that we would want a legal personality for the Union, that we should have more majority voting and that there should be a Foreign Minister. As I put it to the Prime MinisterI think that he saw a googly coming and decided just to play it straight back, if he couldas Germany is prohibited from having a nuclear weapon by the NATO treaty, but we are committed by article 5 of that treaty to a joint alliance in the defence of our interests, if NATO and Germany are going further abroad and there is talk of the European Union supplementing or subordinating our position on the United Nations Security Council with a European Foreign Minister, a European foreign policy and a European security and defence policy could not work because of such conflicting internal collisions.
	The whole problem with Europe is that it does not workit needs to be remedied. It is undemocratic and it needs to be reformed. If people are not prepared to listen, yet we put our case in a measured and proper manner, there will be no option but to withdraw. However, I set that against the landscape that I have described. It is not an objective in itself

Mr. Deputy Speaker: Order. The hon. Gentleman has had his 15 minutes.

Gisela Stuart: This is one of those many occasions on which I follow the hon. Member for Stone (Mr. Cash). I did not want to interrupt his speech, but he simply never addresses one point when he talks about parliamentary democracy. By its very nature, Parliament rarely has the means of finding an opinion that is contrary to the Government's because the party with the most seats forms the Government. It is not undemocratic that the Government win votes, because that is the way in which the process works.
	I want to ask two questions that are specific to the Council meeting in the hope that the Minister for Europe will be able to address them. In the context of enlargement, will there be any consideration of the problems that giving Kosovo an independent status could cause with Russia? It would be the first state that was not a former nation state to be given independent status, so that could be seen as a green light for some of the rebellious groups on Russia's borders.
	Secondly, what progress is being made on the security of energy supply? I find it extraordinary that that is not at the top of the agenda, especially, as we heard earlier, given the quite extraordinary way in which Germany is conducting itself in its dealings with Russia. I look forward to hearing what the Minister will have to say about that when he winds up the debate.

John Horam: The hon. Lady is absolutely right about energy. Is there not a considerable danger that Russia will simply pick off individual states one by one, as it has done with Germany, and say, Have a pipeline and all is forgiven.?

Gisela Stuart: I absolutely agree that that is the danger.
	One of the features of these debates is that they are very much like groundhog day. We never get to grips with the way in which the European Union really works because we are dealing with such a long-term process. It was mentioned earlier that if one wants to get something on the agenda, one has to flag it up about two years in advance.
	It is easy to overlook the way in which the process by which the European Union forms its institutions actually works. There is no single voice with any cohesion within the Union, other than the one calling for deeper European integration, and it is foolish to think otherwise. There are two ways of achieving that deeper integration. The first is to use crises, and the other is to create new institutions. Rather than anyone saying, On this occasion, we will deal with the problem in hand, crises, whether it be a terrorist attack or bird flu, are used as a pretext for setting up structures that lead to deeper integration. New institutions always start with a particular function but end up doing something quite different. My objection to that is the absence of honesty; what is proposed may be fine, but we should be up front about it.
	It is interesting to follow the path of the European Defence Agency, an institution that is just emerging as something quite different from what it was meant to be. I hope that the Government will keep a close eye on it to ensure that it delivers what it was originally meant to deliver. It is a bit like a mixture of Cardinal Newman and Kevin Costner's character in Field of Dreams. The European Union believes the saying, Build it and they will come. Cardinal Newman believed that it did not matter how small the step was, as long as it was a step forward, and that applies to attitudes to deeper integration, tooone must never turn back, because to do so is to be regarded a heretic.
	The European Defence Agency started life just before the European Convention process started in 2003. Defence has largely been outside the treaty obligations. Any real, big progress in defence co-operation has always occurred when the UK and France decided to do something, and things would move on from there. It was during work on the Convention in 2003 that it was first rumoured that a new agency was to be set up. I thought that it was an extremely good idea, because it was to be called the European military capability agency, and it was supposed to identify and monitor military capacity. When it was first set up, the UK Government were most concerned that it was the Commission's way of making defence procurement a Commission responsibility through the back door, but that was never mentioned, and the agency was set up. It was a key part of the constitutional treaty, and although the treaty was rejected, we went ahead with the agency because the truth was that we did not need the treaty provisions to set it up. The UK was comforted by the thought that it was run by a Brit.
	If one looks into the way in which the agency operates, there is still a hell of a lot of duplication going on. It seems to be leading to greater protectionism, too. It has a budget of 22 million for 2007, which, in defence terms, is chickenfeed. The United States of America spends $18 million a month supporting Pakistan in its counter-terrorism activities, so 22 million for the whole of Europe is not very much. However, what the agency does with that small sum is bicker and argue. Four or five years after its original, very helpful, purpose was decided on, it is enlightening to look at the agency's report on what it thinks that it has achieved.
	The agency thought that its major achievement was
	a Code of Conduct on Defence Procurement,
	which shows that it concerns itself with procurement, rather than with conducting a real audit of the capabilities and shortcomings across Europe, or with setting out who needs to do what. The agency claims that its website is a big achievement, and that its
	Electronic Bulletin Board now carries details of over 60 contracting opportunities.
	The agency
	supports the consensus on the need for less duplication, more specialisation and more interdependence in the European Defence Technological and Industrial base,
	but it goes on to say that it supports
	less dependence on non-European sources for key technologies.
	That was not the original idea; the original idea was to make the money spent far more effective by making sure that, when a country purchases something, it fits in with what is needed across Europe. That does not mean that there should be only European purchasing, or that we should become protectionist. The agency regards it as one of its main achievements to have made things much more protectionist. Towards the end of the document, under the heading, Some negatives, the agency casually mentions that
	There have also been disappointments to set against these encouraging developments. Principally, we still lack evidence of real readiness on the part of 
	member states
	to take significant steps towards repairing the now familiar capability gaps in any early time-frame.
	Many Europeans regard the institutions as a huge achievement, but all that we have done is set up a bureaucracy that bickers about how much money it spends. The UK is comfortable with the agency, because it was headed by a Brit but, in its own words, it has failed to address the problem that the EU must confront if it wants to be a serious player in defence. It must start spending more on defencedespite all the protestations, defence spending continues to go downand rather than fighting NATO, it must start to work with it.
	The Foreign Affairs Committee has just returned from Afghanistan. The operation there is not a proper NATO operation but a balkanisation of NATO troops. Command is provided by the international security assistance force, but the national units protect their own turf, and in some cases they are sitting on their hands. In Riga, we did not secure the advances that we wanted, but the good Europeans are comfortable in the knowledge that they have created an institution. That happens repeatedly, so I urge Ministers to demonstrate at the Council the healthy pragmatism for which the Brits are renowned. What is the purpose of the institutions that we have set up, and are they delivering it? For most partners, the setting up of institutions and initiatives is a mechanism to achieve deeper integration. I will admit that I am wrong the minute that a French or German politician says that there are some EU functions that are better performed by the nation states. But no one says so, as there is a continuous push for deeper integration.
	I care about the issueand this is where I have a deep disagreement with the hon. Member for Stone because I do not want to return to an association of trading states. The EU should have political and trade functions, and it should work effectively. It appears, however, that with every step, we are moving further away from the people who have given us their consent. Their disillusion with the EU has deepened, because it is not delivering. The EU therefore risks falling apart, which would be a matter of deep regret.
	I wish the Minister fair speed at the European Council, and I look forward to his response, particularly on Kosovo and energy.

Richard Spring: It is a great pleasure to follow the hon. Member for Birmingham, Edgbaston (Ms Stuart), who made a telling point about the damaging growth of spurious bureaucracy in the EU. Her key point, however, was that people do not have a sense of ownership of EU institutions. As my hon. Friend the Member for Stone (Mr. Cash) said, almost every aspect of our national life is subject to the influence of the EU, but people have no sense of control. As a result, there is a disconnection from the process.
	I agree with the Foreign Secretary that there should be an open door to new entrants. I accept, too, that for some countries on the borders of the EU, the possibility of membership is helpful in achieving reforms. I wish to explore that, but before I do so, it was Willy Brandt who said that the trouble with politicians was that they went into politics to resolve a given set of problems. Once they had done so, however, they failed to move on. The EU is a classic example, as the challenge that it faces is not one of constitutional centralisation, which is quite irrelevant to its needs, but one of demography and lack of competitiveness. Astonishingly, UK corporation tax, which used to be lower than the EU average, is now higher. As a percentage of world trade, the European single market is diminishing as a result of globalisation and other challenges. We have become more insular and obsessed with policies and directives that do not address those challenges for the long-term benefit of the people of this country and of other Europeans.
	I echo the hon. Lady's point. Notwithstanding all the ambitions for a common foreign and defence policy, what we have seen in Afghanistan is truly shocking. Although that is nominally a NATO exercise, our European partners have been unwilling to play their part in dealing with the terrible situation in Afghanistan, which is universally regarded as a huge challenge for all of us. There seems to be an inverse relationship, with those who plead more for political integration and centralisation being unwilling to face their domestic electorates and argue for the defence spending to make that credible and viable, and those who are conceited enough to believe that the European Union should be a force in the world being unwilling to argue with their domestic electorates for adequate defence spending. That makes a mockery of the EU's demand to be listened to.
	Like other hon. Members, I shall speak about the issue of Turkey. We sometimes forget that the accession process has been going on for a long time. Turkey became an associate member of the EEC in 1963. The formal application to join the European Community was made in 1987. Turkey was officially recognised as a candidate for membership in December 1999 at the Helsinki summit of the European Council. The negotiations for Turkey's entry started only in October 2005. With the current problems, the issue will take at least a decade to resolve.
	We should recognise the extraordinarily brave part that that country played during the cold war, right on the border of the old Soviet Union. We should respect the fact that Turkey played a significant part in our defence and our freedoms. Its geographic location enables it to play a hugely important part not only culturally, but militarily, between Europe and the middle east.
	I am pleased to note that after some alarming messages from the German Chancellor about her view of the current crisis in Turkey's negotiations, she has accepted that a dialogue with Turkey must continue, however difficult that is. She has accepted the view of the European Commission, which is probably far too tough. At least she is not going further, as she previously seemed to be indicating. The attitude in Germany and France is not driven by an important geopolitical consideration of the future of Turkey and its relationship with the EU. It is driven by domestic attitudes and politics, which in my view is wrong.
	The EU Commission has frozen eight out of the35 chapters for negotiation. Those are the free movement of services, the right of establishment and freedom to provide services, agriculture and rural development, financial services, fisheries, transport, customs union and external relations. There are huge demands on Turkey and all derive from the difficulty of creating an adequate customs protocol.
	As several hon. Members have noted, one of the barriers to negotiations is the key Turkish demand that the isolation of Turkish north Cyprus be lifted. On a strict legal interpretation, Turkey is in the wrong and should admit Greek Cypriot ships to its ports. However, there are powerful domestic reasons why that is not happening and the issue remains a flashpoint.
	I am proud of the fact that in the House there is almost universal recognition of the importance of Turkey's membership of the EU ultimately. I agree with the Prime Minister, who said in Latvia recently that it would be a serious mistake to send a negative signal to Turkey over its EU membership. There are presidential elections in Turkey at the beginning of next year and parliamentary elections at the end of the year. In 2008 there are European elections in a number of countries, notably Germany. So there is a window, but not a large one, for us to consider Turkey's future.
	Because of all the to-ing and fro-ing over the future of Turkey's accession, there is waning support for it in Turkey itself. Some polls suggest that a majority would wish to break off accession talks altogether, and there is certainly a considerable decline in the number of those who favour joining the EU at all.
	At this critical juncture, when there are so many huge problems in the middle east which wash up on to these shores, Turkey has a unique role to play. It has excellent relationships with Israel and with Arab countries. It has committed its troops to Lebanon. There is a Jordanian-Turkish initiative known as the neighbourhood forum which could at least be the basis for countries in the region coming together to consider the terrible problems that are besetting it.
	I hope that a clear message goes out from this House and from this Government that for all Turkey's difficulties we need to support its accession and to encourage it to overcome those difficulties in a proper, constructive dialogue with the European Commission.

Geoffrey Clifton-Brown: My hon. Friend mentioned next year's elections in Turkey. Does he think that it would be deeply regrettable if Turkey were to move from being a secular state towards becoming an Islamic state because it felt snubbed in its membership negotiations with the EU?

Richard Spring: My hon. Friend is absolutely correct. Turkey is a secular nation. For all its human rights and religious minority difficulties, it is moving in the right direction. A snub at this point may well have that effect, with awful consequences not only in Turkey but in the surrounding Islamic countries, which would draw a clear message from it.
	I should like to refer to another country on the borders of the European UnionUkraine. Many of the states of central Europe were offered the prospect of membership of the EU and NATO as an ultimate reward for their diligent pursuit of democratic and market reforms, but Ukraine received no such serious offer after it had declared independence. That has rendered its transition that much harder and given political ammunition to those in Ukraine with a deep mistrust of the west. Western scepticism may thus have become a self-fulfilling prophecy.
	The orange revolution constituted a critical point of departure in the EU's new relationship with Ukraine. Over the past year, there has been a concerted effort to upgrade the EU-Ukrainian relationship, despite persistent political instability in Ukraine. That includes pressure on it in terms of creating a market economy, making progress on anti-dumping legislation, efforts to simplify visa rules, and a feasibility study on an eventual free trade agreement. The idea that this should, in stockbroking language, be all or none is irrelevant. In relation to a country such as Ukraine, which is of huge geopolitical significance given all the pressures, particularly from Russia in the north, we should have flexible arrangements that enable it to participate in aspects of life within the EU in order to encourage it to make progress on democratic practices, human rights and opening its markets without ultimately requiring full EU membership. Such flexible arrangements would work much more satisfactorily in the globalised world that we inhabit.
	The EU considers Ukraine a priority partner country and calls for an increasingly close relationship. Indeed, an EU-Ukraine summit took place in the autumn of this year. It is very important that the country be stable and successful. For example, a large amount of the energy supplies that come westwards from Russia comes through Ukraine. Regardless of the outstanding problems, we should extend the hand of friendship to Ukraine at this time and try to develop these relationships. Ukrainians look to this country to lead on the matter. Many have contributed to the economic life of this country and listed some of their companies on the London stock exchange. They feel comfortable in this country and look to us to take a more pragmatic view than some of our European partners of the European Union and its future.
	Let me consider two other countries that have been especially problematic. Other hon. Members have commented on Croatia and the western Balkans. However, I should like to consider the problem of Moldova, which is a close neighbour of existing EU countries. In February 2005, the EU and Moldova adopted a bilateral action plan. It is a political document that sets out strategic objectives to be fulfilled over a time frame of three years. It covers strengthening administrative and judicial capacity, respect for freedom of expression and freedom of the media. Furthermore, there are issues linked to border management and the fight against trafficking and organised crime. Of course, it is a poor country with a low standard of living, yet we need to encourage it to undergo reforms.
	Moldovans are in a difficult position because they are so dependent on the Russians. We should assist them through opening up our markets and encouraging investment and other reforms so that their dependence on Russia lessens and they become more integrated with the more sophisticated economies to their west.
	The same applies to Belarus. That country is in a difficult position through an unsatisfactory political process. Again, the assistance that the EU pledged through social and economic development needs tobe provided in a future European neighbourhood partnership agreement. We have learned in the past few years that we cannot escape the problems of our neighbours. If there are problems in those countries, we get migratory flows and all the attendant difficulties.
	Trying to find a way forward in the western Balkans, trying to find a way of securing Turkey's accession to the EU and stretching out the hand of friendship to Ukraine to involve it more in the western side of Europe and our conduct of our national lives is in our interests. From a strategic, security and economic point of view, those countries will be increasingly dependent on us. We should encourage them to undertake the reforms that will enable them eventually to have a much improved standard of living, give their people hope, and, in doing that, underpin democratic standards in their countries. The people of these countries would welcome that.

Kelvin Hopkins: I apologise for being unable to be here for some of the early part of the debate.
	It is a great pleasure to participate in such debates, which always constitute a learning experience for me, and possibly for others, because we always hear something new. However, we inevitably have to say some things more than once, and I regret to say that I wish to repeat some points that I have made previously because they bear restating.
	I support the comments of my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on her concern about the lack of sceptical voices at European Commission level and in the European institutions. It is as though the structures are organised in such a way that no dissenting voice is heard. My party introduced proportional representation on a regional basis for elections to the European Parliament. One of the effects was to eliminate all the Eurosceptic voices from our delegation. I do not know whether our leaders intended that, but that was the result. We now have universal Euro support among the Labour Members of the European Parliament, and that is worrying.
	Many millionssometimes majoritiesof people in European Union nations are sceptical about the European Union's actions, what their leaders do on their behalf and, especially, what the Commission does. They should have a voice. If the current position continues, deep disillusion could set in with the idea of co-operating in Europe. That would be damaging even for those who, like me, oppose the European Union as such. I have always believed that we should have a looser association of member states, co-operating voluntarily but retaining our national democracies, so that we can retain our distinctive choices about how we govern ourselves and how we are governed while working in a brotherlyI would personally say comradelyway with people in other member states. I have contact with representatives of political parties of the left in Scandinavia, Germany and elsewhere. We have some very productive discussions, but we are sceptical about the European Union.
	With the election of Angela Merkel as the new German Chancellor, we have seen another federalist obsessive taking significant power and driving towards a future for the European Union about which I have profound doubts. She seems determined to bury the independence of member states and the democratic rights of their citizens in a much more bureaucratic, authoritarian state of Europe. She also wants to revive the European constitution. Some months ago, a parliamentary colleague clapped his hand on my shoulder and said, Now that we are not joining the euro and the European constitution is dead, nothing divides us. He said that with a smile on his face. I replied that I hoped that that was the case, but unfortunately it does not seem to be because there are peopleAngela Merkel is one of themwho are determined to revive the constitution and to drive everyone to join the eurozone, which would be absolutely disastrous.
	The system of different countries having the European presidency for six months gives each country its moment of glory and influence, and that is fine. However, in relation to our discussing how strong borders should be, or whether they should be porous or almost non-existent, Finland has the presidency at the moment, and it does not worry about borders. Finns have told me that people do not want to go to Finland because it is a very cold country with an extremely difficult languagethat is what Finnish politicians say. However, people do want to go to other countries in the European Union. The countries that are affected by changes in the strength of borders need to have more influence in the debate; they should have a bigger say in what goes on than those who are either unaffected or keen to have less policing on their borders because they want to move away from the poorer countries towards the richer countries. It is understandable for the people of those countries to take that view.
	The next country to hold the presidency will be Germany, which seems determined to revive the apparently dead parrotthis one might still have some life in itof the European constitution. I urge my right hon. Friends on the Front Bench, who will be negotiating on our behalf, to uphold the traditional British position of saying no to a federal state and yes to an association of independent member states, and to ensure that that is what the future of Europe is all about.

William Cash: Much as I admire the hon. Gentleman, I have to say that what he is saying is not exactly accurate. Labour Members went straight through the Lobby voting in favour of the European Union and its treaty a few months ago, on Second Reading of the European Union Bill.

Kelvin Hopkins: There are sceptical voices across the Chamber, and some of us are seeking reassurance. There have been occasions on which I have not supported my party in some votes on European matters. One of the reasons why I speak in so many of these debates is that there are many others in the party and in the broader Labour movement who take a similarly sceptical view of the European Unionnot on a narrow, nationalistic basis, but on a socialist basis. They want to see a democratic, socialist and egalitarian Europe, not a free market Europe that drives inequality rather than equality. That is a legitimate position, and it is certainly one that I hold.
	Apparently, Germany is determined to press ahead and to try to revive the European constitution. I want to make sure that my right hon. Friends on the Front Bench tell those in Germany that the constitution is dead. I hope that the French, Dutch and other European nations, which have either not made the decision or were due to have a referendum, will say the same. I also hope that the constitution will not be slipped in by the back door and effectively implemented without a formal decision.
	Some Commissioners take an even stronger line. Margo Wallstrm, for instance, said that we should not depart too much from the constitutional treaty, even without ratification. Actually, she wants to go further by taking out some of the provisions for unanimity that remain in the draft treaty, so that everything is decided by qualified majority voting and the European Union is much more centralist. We must say to her and others that Britain does not support that view, and that we want to retain unanimity on crucial matters, which must be decided at national level. I am sure that other nations feel the same.
	The hon. Member for Stone (Mr. Cash) was almost praising the Chancellor for his management of the economy, as we have benefited from being outside the eurozone

William Cash: I said that being in it would be over his dead body.

Kelvin Hopkins: I note the hon. Gentleman's comment from a sedentary position. Nevertheless, the economy has done well in recent years, and we must give credit to the Chancellor for presiding over that success. His greatest success, however, is that he and the Treasury kept us out of the eurozonea splendid decision that I fully support. In doing so, he has saved the British economy an enormous amount of difficulty [Interruption.] Well, it is at least possible that he may soon be the Prime Minister, and I hope that he can continue with his splendid views on such matters in that new office.
	Those who want to join the euro do not appreciate the importance in managing an economy of having control of the value of one's currency relative to other currencies, and of having control over interest rates. If macro-economic policy cannot be controlled at member state level, inevitably, states will be tied to a policy that is not necessarily in their own interests. We have seen that inside the eurozone already. Some countries joined the euro at a parity that was too high for their economy, and some joined at a low parity, which has been advantageous. Ireland and Spain have benefited tremendously from that as they were forced to reduce their interest rates.
	According to studies of the appropriate interest rates in countries given the state of their economies, the Spanish and Irish interest rates should be higher and the German interest rates much lower. It is no surprise that demand is constantly depressed in the German economy, as Germany cannot reduce its interest rates to stimulate demand. It does not do too badly in terms of trade but, internally, it is constantly in near recession as it cannot reduce interest rates and therefore raise domestic demand.
	Fortunately, we have careful control of our interest rates, which we adjust monthly when necessary. We might argue about whether they should go up or down, but at least we can adjust them according to our own economy and our own needs. If we chose to do so, we could also take steps to adjust our exchange rate in relation to the currencies of our trading partners, such as the dollar or the euro. Every major economy ought to be able to do that, and if they cannot they will get into deep trouble at some time or other.
	The best example of that is Argentina. It tied the peso to the dollar and made it completely exchangeable, and the middle class sold all their pesos and bought dollars, which almost destroyed its internal economy. After 10 years of a nightmare, it broke away from the dollar, devalued and started to rebuild its economy. Fortunately, it produces splendid wine, of which it now sells a lot, which is helping its economy grow again. For 10 years, however, the madness of tying a weak currency to a strong one almost destroyed what used to be the strongest economy in south America. We do not want to go down that route. Any country that chooses to bury its currency in that way would make a big mistake.
	I would draw a distinction between a stable exchange rate system like the one that we had after the war and a single currency. With a stable exchange rate system, in extremis a country can change the value of its currency relative to others. We have done that a couple of times in our history, and it has had a tremendously beneficial effect on our economy. At present, of course, the euro is suffering greatly from the fact that the dollar is being devalued, and I expect it to have yet more problems because of the inability of individual member states to adjust their own currencies relative to the dollar. It is too rigid, too inflexible.

Gisela Stuart: The problem with the eurozone is not just its inability to set its own interest rates, but the fact that if it is to be effective as a single currency, much deeper political integration will be required, along with much greater transfers of funds collected centrally to parts of the zone. We will have to face up to that problem sooner or later.

Kelvin Hopkins: My hon. Friend is absolutely right. McDougal's report about 30 years ago pointed out that without the capacity for major fiscal transfers between member states, it would be impossible to run a single currency without a single tax and benefits system allowing standard benefit and tax rates throughout. The system would not, in the end, work, and there are those who think that, in the end, the eurozone will fail for that reason.
	A few weeks ago, the danger arose that citizens of our country would be able to buy alcoholic drinks on the internet without paying the duties and taxes that are due here. No doubt that would have been tremendously attractive to heavy drinkers, but it would have caused mayhem. It would have destroyed the alcohol licence and retail trades in Britainand at a time when we are grappling with the problem of excessive drinking among young people and the binge-drink culture, an ocean of rock-bottom-cheap alcohol would have suddenly flooded the country. It would have been a nightmare.
	Interestingly, however, the European Union backed off. It did not press its case. There must have been some pretty heavy lobbying behind the scenes by the Treasury, and rightly so. I assume that the Treasury said, If you do that, the European Union will be in serious trouble with us, and as a result the EU backed off from the mad idea of allowing people to buy cheap drinks in Latvia. I believe that Latvia was the country that would have benefited: it was to be the warehouse providing cheap drinks for the Britishindeed, for the whole of Europe.
	It is significant that when a point is reached at which the European Union might be seriously damagedmight start to fall apart because it has done something utterly and totally daftit backs off. It has backed off over this issue, and I hope that it will continue to do so when the daftest ideas arise. I certainly hope it will do so when it comes to pressing the case for the European constitution and forcing countries to join the eurozone, because that would cause serious difficulty for Britain and many other countries.
	I support my right hon. Friend the Foreign Secretary and her Minister for Europe in their negotiations. I hope that they will adopt the position they have adopted in the past and will represent Britain and our view effectively in Europe next week.

Adam Afriyie: I welcomed much of what was said by the hon. Member for Luton, North (Kelvin Hopkins).
	It is a great privilege to serve as a Member of this House. It strikes me that its primary function in a democracy is to create, amend, modify and repeal the laws of the nation, hopefully in the interests of British citizens. I think that people elect their Governments to serve the national interest. Sometimes, of course, it is necessary to sign international treaties on trade or aid, provided that that is in the interests of British citizens. However, such agreements should not include the wholesale handing over of control of our defence, our economy, or powers to make or modify our laws.
	It is worth reflecting for a few moments on what might have been if citizens and campaign groups had not alerted the Government to some of the dangers posed by adventures that the Government had hoped to undertake in recent years. Having played a role in Business for Sterling and the No to the euro campaign since 1998, I am very much aware that in 1997-98 about 70 per cent. of the public was of the view that it was inevitable that we would join the euro, and about 90 per cent. of members of the Government of that time were in favour of joining the euro. It was almost as though we were in bunkers and outgunned on all sides, but graduallyand under duressover a period of years a rational view prevailed. It was eventually recognised, including by the Chancellor, that maintaining our control of British interest rates, and thereby being able to control our economy via them, was the best way to generate a more competitive economy.
	It is also interesting that not too long ago there was an ardent Government campaign for us to sign the European Union constitution. I remember commentating on Sky as the Prime Minister actually signed the EU constitutionwe should not forget that he put his signature to the constitution. There was also a massive campaign in favour of itso thank goodness not only for our own citizens' views, but for the French and the Danish for rescuing us from what could have been a catastrophic position. I will not go through all the arguments on this topic, but if we had signed the EU constitution we would not be a freely trading independent state; we would be a subservient state of a European superstate. In hindsight, both now and in years to come, we are, and we will be, glad that we did not sign it.
	Members have spoken eloquently on sovereignty, the supremacy of Parliament, defence and controlling our borders as part of what makes being an independent state, so I shall focus on business and competitiveness before going on to share some of my hopes for the future of the EUbecause I am in some ways fairly, although also cautiously, optimistic about its future in a new form.
	We must never forget that business is the engine of our economy and that freely operating British businesses that do not have too many burdens of bureaucracy on them generate all the jobs, all the income and all the taxation that pays for the good things that we want in society, such as health, education and pensions. I did mean to say that all the jobs come from business, because the taxation raised from business is what pays for Government jobs, quango jobs and our doctors and nurses. Any unnecessary burden or regulation on business is unwelcome and should be questioned.
	It is a striking fact that about 70 per cent. of business regulation and legislation originates in the EU. We could claim that many of the regulations and lawsor the aspirations of many of themare in our national interest. Plenty of arguments could be put forward on that topic. However, what is clear is that the EU has in many ways moved on from prescriptive legislation in the past year or two. It has begun to look at principles-based legislationa simple principle is brought into effect and then it is left to businesses to determine how best to put it into practice and to make their own decisions without being overwhelmed with reams of paperwork. Sadly, the Government have not yet cottoned on to that, or to the fact that it means that they no longer need to gold-plate legislation coming from the EU. One can simply reflect a few lines or pages, rather than tens of thousands of words and hundreds of pages of regulation, on British businesses.
	The British Chambers of Commerce estimates that the new burden of business regulation is about 50 billion, about 70 per cent. of which comes from the EU. I recall several years ago looking at the working time directive guidance. There were over 100 pages. I sat scan-reading it for about five or six hours, when at that time I should really have just been getting on with running my business. Even to this day, I cannot quite fathom the calculation for working out whether employees have been working an average of 48 hours a week over a 17-week period; it is mayhem. I can pretty much guarantee to the House that many small and medium-sized businesses will not be adhering to the working time directive by keeping such records. If they implemented all the detail in much of that guidance, they would simply be unable to run their businesses.
	On European regulation, there are two main challenges. First, although not all the stock of existing regulation needs to be undone, that needs to happen to a certain degree. Secondly, we must consider the flow of new regulations. Fortunately, that flow has slowed somewhat, but a lot remains to be done in stemming it further. That is largely a job for this House, as it examines the regulations coming through via statutory instruments and their implementation.
	I want to finish by painting a slightly more hopeful picture of the future of the European Union. We are all very aware of the existing EU's failings and the challenges that we face, but I am hopeful and reasonably optimistic about the medium to long-term future. With enlargement come opportunities; with enlargement, the mood and culture of the EU change. Since Latvia, Lithuania, Estonia and Poland joined a few years ago, the culture of the EU has become more entrepreneurial. Those countries recognise the benefit of commerce and free trade, not only within the EU but in a global context. To a certain degree, that adds to the EU.
	We also have the opportunity to adopt more inthe way of principles-based legislation, instead of prescriptive regulation, and to reform European institutions. Members have mentioned the changes that they would like to see, many of which are very sensible. In the light of enlargement, perhaps it is time to consider having a single European language. I am not sure which language we might nominate, but that would certainly save a lot of translation. What do we think?

Daniel Kawczynski: English, of course.

Adam Afriyie: Perhaps English would be the sensible choice as the language of the EU.
	Perhaps it is also time seriously to consider ending the policy of switching between buildings in Brussels and Strasbourg, which costs millions of pounds each year. This is a good time to deal with such issues.

Mark Pritchard: Is my hon. Friend aware that many years ago Europe did indeed have a single languageLatina single currencygoldand a single federal empire, which was of course the Roman empire? We know what happened to that.

Adam Afriyie: I thank my hon. Friend for that intervention. My Latin is a little rusty, but I do recall the Roman empire.
	I studied agricultural economics 20 years ago, and on looking at the common agricultural policy I decided then that it would probably take 10, 20 or even 30 years before we saw fundamental reform of it. Well, 20 years later, we are still in exactly the same position. We have a fresh opportunity to look at the CAP and, indeed, at the common fisheries policy. Why do we not embrace this opportunity now? I urge the Government to do solet us open up the dialogue.

Kelvin Hopkins: Would it not be simpler just to recommend the abolition of both the CAP and the common fisheries policy?

Adam Afriyie: I shall certainly consider the hon. Gentleman's comments very carefully, but I was not necessarily proposing that at this precise moment.
	There is also a great opportunity for democracy. Many Members have spoken about the democratic deficit and the fact that European citizens feel disfranchisedthat they feel no connection with the European Parliament and the other European institutions. There is an opportunity to establish a flexible, outward-looking grouping of independent nations, and enlargement brings that prospect slightly closer.
	In essence, might we dare hope for a newly evolved European Union in years to comea grouping of democratic and independent nations co-operating in various ways on trade and aid, and in many other fields? Why should we limit our ambitions? Why do we not hope for a massive expansion of the EU? Why not add 10, 20 or even 100 new independent states? If we add 100, we will have outgrown Europe, so perhaps we would have to rename the EU. Perhaps we could call it a global economy.

Philip Davies: It is a pleasure to follow my hon. Friend the Member for Windsor (Adam Afriyie), who made a typically thoughtful and intelligent speech. I want to concentrate on one of the most fundamental issues facing Britain and Europe. Despite its importance, it is subject to little if any debate in this House.
	Opinion polls consistently show that between 40 and 50 per cent. of the UK population favour Britain's withdrawal from the EU, and that less than half the remainder are convinced that we should remain in that organisation. That means that a clear majority of the British public are either convinced that we should withdraw or are sceptical about our continued membership. Indeed, in opinion polls more people express their support for EU withdrawal than say that they would vote either Labour or Conservative in a general election.
	The question of EU withdrawal is yet another matter on which the British public are way ahead of politicians. Back in 2004, the EU was included in the US Central Intelligence Agency's World Factbook, an open-source publication that tracks the key characteristics of every nation around the globe. That was the first time that a supranational body had ever been included in a publication dedicated to tracking developments in nation states. The CIA said that it had included the EU because it had
	many of the attributes associated with independent states: its own flag, anthem, founding date, and currency, as well as an incipient common foreign and security policy in its dealings with other nations. In the future, many of these nation-like characteristics are likely to be expanded.
	So much for the intelligence-gathering abilities of the CIA, as I could have told it that a long time ago. I might also have mentioned that the EU has its own president, Parliament, Court and embassies.
	It is hard to argue against many of the indictments against the EU. As my hon. Friend the Member for Windsor said, about 70 per cent. of our laws now emanate from the EU rather than from here. The rulings of unelected Commissioners take precedence over the wishes of democratically elected national Parliaments. Most people understand that the EU is inefficient and wasteful, and that it suffers from systemic corruption.
	More often than not, EU supporters do not attempt to defend the organisation against those charges. From time to time, warm words are offered about reform, but little debate is ever allowed on the fundamental question of our relationship with a body that is failing and undemocratic. Instead, those who support the EU engage in skilful if sometimes frustrating shadow boxing.
	For example, I recently tabled some questions about the number of our jobs that are dependent on our membership of the EU. I was told that about 3 million jobs depend on our trade with EU countries. There is no doubt that those jobs and that commerce are among the benefits of free trade, but they are not benefits of EU membership, as I shall try to explain later.
	However, responses of that sort are not unusual. People who support the EU project bring the debate back to the UK economy and jobs, and in my opinion they are right to do so, as few people give much thought to the EU and its role in our democracy. Insteadand of coursethey think about their jobs, pensions and the money in their pocket, but EU supporters are wrong to suggest that arguments based on jobs and the economy make the case for the UK's continued membership.
	For most people, the distant and impersonal EU is less tangible than questions about schools, hospitals, police on our streets and the money in our pockets. Few spend much time thinking about the EU constitution, but mortgages, bills and pensions occupy most people's thoughts every day. Equally, people in business are likely to be far more concerned about making money and growing their businesses than about questions to do with the structure of the EU.
	It is on the economy that the argument as to whether Britain remains in the EU will be lost or won, as those who support our staying in the EU realised a long time ago. By presenting EU membership in economic terms, successive Governments have been able to sell what is essentially a political and unpopular project to the British people. However, we should look at the figures and examine the economics. When we consider the EU's effect on trade, jobs and growth we find that the case for Britain leaving the EU is more compelling than ever.
	We are told that, if we were ever to withdraw from the EU, Britain's economy and our trade with our European neighbours would suffer, and that jobs and prosperity would be lost. We are told that more than60 per cent. of our trade is with the EU, and that withdrawal would mean the loss of our markets there. We are told that the single market has been good for our economy and that we would suffer financial consequences from withdrawal. We are told that if we left 3 million jobs would be lost.
	If I were the managing director of a small company or if I were employed in manufacturing, I would find those arguments compelling.

Kelvin Hopkins: The hon. Gentleman makes a strong point; in fact, as we have a big trade deficit with Europe, they need us more than we need them.

Philip Davies: The hon. Gentleman is absolutely right and I shall deal with that point in a few moments.
	When we examine the issues in any detail we find that the EU is bad for trade and bad for jobs, that Britain is worse off by being in the EU, and that withdrawal would actually give Britain a more global outlook to meet the challenges of the 21st century.
	We are told that 55 per cent. of our trade is with the EU and that if we came out we could say goodbye to that, as well as to about 60 per cent. of our economy and 3 million jobs. I could quibble about the statistical sleight of hand that led to those figures, but I shall not, because to do so would give credence to the argument that that trade would be lost if we left the EU which, as I shall explain, is patently ridiculous, as the point made by the hon. Member for Luton, North (Kelvin Hopkins) illustrated.
	Trade will not be lost, because it is a two-way street. Our European neighbours make money from us, too; in fact, they make more money from us than we make from them. Britain's balance of trade with the EU has been running at a deficit since we joined in 1973. According to figures from the Library, between 1973 and 2005 the cumulative trade deficit between the UK and the EU amounted to an astonishing 230 billion. Our partners have made 230 billion more from us than we have from them.
	Given the importance of the UK to EU countries, ask yourself this, Madam Deputy Speaker: how many European businesses would seriously say, All right, that's it, Britain's left the EU. I don't care what it does to my profit margins, but I'm no longer trading with them on principle? How likely is that? In fact, Switzerland, a non-EU country, enjoys a healthier balance of trade with the EU than us and has a higher proportion of its trade with the EU than us. So much for the benefits of EU membership.
	The deficit continues to rise while the UK enjoys a trade surplus with the rest of the world. Our surplus with the USA continues to rise every year. We were trading with Europe long before we were members of the EU and I bet we shall still be trading with countries in Europe long after we have left.
	Let us consider the so-called fact that 3 million jobs depend on our EU membership. They do not; they depend on our trade with the EU. Trade with Europe is not dependent on our EU membership; nor are the jobs that it supports. The only jobs dependent on our membership of the EU are those of EU bureaucrats and civil servants from this countryI admit they might have to find alternative careers. I know that the EU is a bloated bureaucracy, but it hardly accounts for 3 million British jobs.
	Proponents of the case for the EU try to claim that it is responsible for 55 or 60 per cent. of our trade, but it is not. Exports, of which those to the EU account for about half, are responsible for 21 per cent. of the UK's gross domestic product, so trade with EU countries accounts for only about 10 per cent. of our GDP. I do not believe that trade would be lost if we left the EU, because so many sectors of our economy have few or no dealings with the continent yet they must all bear the burden of EU red tape and regulation.

Jeremy Browne: I am listening to the hon. Gentleman's speech with great interest. What is his view on the transitional arrangements in the Conservative party with regard to its membership of the European People's party? Is he an enthusiast for retaining membership for the foreseeable future?

Philip Davies: Of course, I support my right hon. Friend the Leader of the Opposition in his quest to take us out of the EPP, but UK membership of the EU is far more important than my party's membership of the EPP.
	If I had a large multinational business I might be able to shoulder some of the regulatory burden, but the effects on a small business in Shipley can be crippling. If anyone wants the truth about the EU and the much hailed single market, they should not ask me and they should not ask a British politician. They should go straight to the horse's mouth and ask the European Commission. For our friends in the Commission, the EU is unashamedly a political project. For them, unlike our Government, its economic failings do not take away from the validity of the project.

Geoff Hoon: Would the hon. Gentleman like to give one example of one piece of European regulation that is crippling any one business in his constituency?

Philip Davies: If the Minister will be patient, I will explain the problem of EU regulation. Indeed, I come to the very point now. Earlier this year, the Enterprise and Industry Commissioner, Gunther Verheugen, said that EU regulations were costing the European economy 600 billion a year. That amounts to about 5.5 per cent. of Europe's total gross domestic product. That is staggering enough: on the Commission's own figures, European businesses are losing the equivalent of the entire GDP of Holland every single year.
	If we consider that against what the EU considers to be the financial benefits of the single market, the case against the EU becomes a bit more open and shut. The most recent Commission estimates are for 2002, when the single market benefits were put at 165 billionquite substantially less than the costs. Even taking account of inflation, the costs of EU membership to business are about three times the benefits. So much for the economic benefits of the EU. Far from being good for business, the bureaucratic EU is actually profoundly harmful to businessand that according to the European Commission itself. I wonder how much of those costs are falling on the shoulders of British businesses and I wonder what a business man might feel about withdrawal when faced with that particular fact.
	ICM recently conducted a poll that found that 54 per cent. of businesses think that the cost of implementing EU regulations now outweighs the benefit of the single market. That poll also showed that 52 per cent. of chief executives think that the EU is failing and that 60 per cent. want what I advocatewithdrawal from the EU and a free trade agreement with EU countries. Crucially, only 24 per cent. of those business people thought that the EU would increase in economic importance in the future, whereas 35 per cent. thought that it would decline. Our future prosperity, Madam Deputy Speaker, depends on trading with countries such as China, India and South America and with the Commonwealth; it does not depend on being part of an inward-looking, backward-looking protection racket, which is what the EU has become.
	Since 1970, the United States has enjoyed net growth of about 25 per cent., yet the EUthis much heralded economic powerhousehas enjoyed net growth of around zero. When it comes to such stark figures, we have to ask whether the EU has contributed towards that sluggish growth. If we compare the EU's stifling levels of regulation and high taxes with the USA's business-friendly, low-tax economy, we are forced to conclude that the EU's social democratic model has contributed to the problem. If the Chancellor is to be believed, the UK has enjoyed the longest period of sustained growth, but what could it have been without the drag of the European Union?
	If we are to compete with the vastly cheaper labour forces of India and China, our economy will need to be agile and competitive with a light regulatory touchnot the EU model of crippling regulation, restrictive employment laws and high taxes. Surely the EU and the British Government must see the economic threat to our economy from India and China. In years to come, Madam Deputy Speaker, historians will look back and say that the biggest winner of the EU project was China.
	Britain puts more into the pot than it gets out. We have been a net contributor to the EU ever since it started. We have contributed almost 200 billion in membership fees alone, and we will add another14 billion to our bill for continued membership next year. The annual cost of the EU for every man, woman and child works out at 873. Can we imagine what a hard-working family of four on a tight budget could do with that kind of moneyabout 3,500? Every minute of 2007, the EU will cost the UK 100,000. Let us just think of the nurses, operations, hospitals, policemen, prisons or even cuts that such a figure could pay for. When you consider how wasteful the EU is, how many people do you think, Madam Deputy Speaker, would think that it was the best way to spend all that money?

Madam Deputy Speaker: Order. May I remind the hon. Gentleman not to bring the occupant of the Chair into his debating points?

Philip Davies: I am sure you would agree with me if you did join in the debate, Madam Deputy Speaker.
	Member states are unlikely to do anything to expose corruption in the EU. Those that are net receivers are unlikely to raise objections about an inefficient and wasteful system. They know that the EU does not work, but it works for them. For net contributors such as the UK, the cost of the EUinefficient or otherwiseis a debate that the Government do not want to happen. They do not want the EU to have to wash its dirty linen in public or for the British public to see how many doctors, nurses and police officers could be paid for with the money wasted in Brussels.
	I am sure that, when I sit down, Government Members will say that my speech shows that the Conservative party is anti-European and that it has not changed. I do not claim to be speaking on behalf of the party; I am speaking on behalf of what I believe in. It is to the credit of my right hon. Friend the Member for Witney (Mr. Cameron) that he has allowed Back Benchers freely to express our views on withdrawing from the EU and the debate not to be shut down, as the Government would like.
	I have tried to argue my case for EU withdrawal as a positive step for the future, not as something that is backward looking, by referring not to historic arguments about constitutions, but to the competitiveness of our economy. If we are to attract investment and win business in the future, we must start freeing ourselves from this stifling political Union. The 21st century, with the emerging economies of Asia, is not a time for uncompetitive protection rackets. Business is global, and if we are to compete, we must be too. Governments must reflect that with a light regulatory touch, and the main impediment to that is the EU. When considering the case for Britain being better off out of the EU, I am reminded of the words from Bill Clinton's 1992 presidential election campaign headquarters: It's the economy, stupid.

Daniel Kawczynski: I must say how much I enjoyed the speech of my hon. Friend the Member for Shipley (Philip Davies).  The Times newspaper recently highlighted the five best MPs and the five worst MPs, and one of the reasons given for choosing who was one of the best MPs was the integrity and courage displayed.

William Cash: It was in  The Daily Telegraph.

Daniel Kawczynski: I beg hon. Members' pardon .
	My hon. Friend the Member for Shipley is a great man who shows great courage and is prepared to put his strong beliefs about the EU before his own consideration for promotion. I applaud that greatly. My hon. Friend, myself and other Conservative Membersall very young peopleare going to take the EU in a different direction. I was born on the day that Edward Heath signed the documents to take us into the Common Market24 January 1972. Of course, when we had the referendum on whether we should stay in the Common Market, I was only three years of age, so I could not vote. Many hon. Members were too young to participate in that referendum, but there will come a timeI am convinced of this more than I am of anything elsewhen my generation of Conservative Members of Parliament will start to address some of the fundamental flaws in our membership of the EU and will make it more appropriate to our generation.
	One of the problems and frustrations that we face is that we in Great Britain play by the Queensberry rules, we do what the EU tells us to do and we are compliant, unlike our partners in the EU who repeatedly break agreements and cheat. An example of that is the Irish. The Irish have recently given their dairy farmers300 million in illegal subsidies. I thought that we were in something called a common market, whereby industries were meant to be treated in the same way acrossthe whole EU. How is it feasible for the Irish to give 300 million to their dairy farmers? How on earth can Shropshire farmers compete against that and imports of cheese and other milk products, when the Irish are flagrantly going against the spirit of subsidies?
	I recently went to Romania. We are going to give8 billion of taxpayers' money to help the Romanians and Bulgarians with their agriculture, so that their systems become comparable with ours. That money is being sent to foreign countries. Our own dairy farmers in Shrewsbury I hasten to say that I am chairman of the all-party dairy farmers group, of which there are now nearly 100 membersare going out of business day after day, while we prop up the Irish, the Romanians and the Bulgarians.

Charles Walker: They are milking the EU.

Daniel Kawczynski: Yes, it is an absolute disgrace.
	We need a more effective energy policy across the European Union. Sweden will be an oil-free society by 2012. I remember visiting Sweden in the mid-80s, when it was already pioneering endothermic energy and various renewable fuels. How marvellous that the Swedes, with a population of 9 million to 10 million people, can be an oil-free society by 2012. We can learn from one another and we should start to co-operate in the energy field.
	Some countries, however, are behaving in complete defiance of what a common EU policy should be. I have already mentioned this to my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady). Germany is the main culprit. It is building a pipeline from Russia across the Baltic sea so that it can have a stable supply directly to its coastline on the Baltic. That will cause huge environmental damage in the Baltic sea, but worse, it is a deliberate attempt to bypass other EU nations. Germany wants deliberately to bypass the Baltic states and Poland and have its own secure supply from Russia. That, in my humble estimation, is a massive breach of what a common energy policy should be. The Government should use their influence to make the Germans think again.
	We forget about the growing importance of Russia in the European debate, although Russia has been mentioned. I applaud the Finnish presidency for focusing on trade relations with Russia. However, we need to work together as EU nations to help when one EU nation is unfairly treated by Russia. As I have already mentioned, the Russians are trying to block all imports of meat products from Poland and are threatening the Poles. As members of the European Union, we should be doing everything to support Poland in its dispute with Russia to ensure that its products have proper access to Russia.
	The Russians are also blocking a lot of Georgian agricultural products. That is the way in which the Russians operate. If one tweaks their nose, they want to retaliate very aggressively. Because of the recent espionage problems between Russia and Georgia, the Georgians are having terrible problems exporting basic foodstuffs and agricultural products. I hope that the Government will use their power of influence to express in the strongest terms that if Russia is to be taken seriously in the future and, even more importantly, if Russia wishes to be a member of the World Trade Organisation, as it aspires to be, it has to act in a more balanced and business-oriented way.

Geoff Hoon: I have listened with interest to the hon. Gentleman's arguments. Having recently visited Georgia, for example, I know the difficulties that are being faced there. However, does he believe that our influence and the influence of other European countries would be stronger or weaker if Britain withdrew from the European Union, as he appears to advocate?

Daniel Kawczynski: At no stageI notice that there is a Whip presentdid I advocate withdrawal from the European Union. I simply said that my generation will change the relationship with the European Union. That is a very different thing.

Tobias Ellwood: I was pleased to hear my hon. Friend's last comments. May I press him on the point about gas and the connection with Russia? Does he agree that the big EU bus was parked outside No. 10 Downing street? When we had the presidency of the EU, there was a great opportunity to sort out a European gas policy and market. The fact that we failed to do so means that every time something happens in Russia, the effect ripples right across. That is why our gas prices go up and down so tremendously. That is likely to happen again when the winter comes.

Daniel Kawczynski: I totally agree with my hon. Friend. Britain will be a major gas importer in future years, so the Government should be doing more to lead the way on securing a major contract with Russia.
	While I am on the subject of Russia, I feel very strongly about the disturbing reaction to the death of Mr. Litvinenko. Of course we should be concerned about alleged poisonings, but we cannot be prosecutor, judge and jury. I was absolutely appalled when the Secretary of State for Northern Ireland, as part of his great wish to become the next deputy leader of the Labour party and to appear on television, accused President Putin on British broadcasting of being involved in the poisonings. That was an absolute outrage. It is not for the Secretary of State for Northern Ireland to accuse the democratically elected President of Russia of poisoning. Yes, we have concerns, but we believe, even with regard to Mr. Putin, that a person is innocent until proven guilty.

Kelvin Hopkins: I do not know whether the hon. Gentleman read last Sunday's edition of  The Independent on Sunday, but it included a suggestion that there might be an Italian connection to the poisoning.

Daniel Kawczynski: I am not here to speculate. I only wanted to record in  Hansard that the Secretary of State for Northern Ireland should be very careful before publicly trying to suggest that President Putin was involved in the poisoning.

Madam Deputy Speaker: Order. Perhaps I can suggest that the hon. Gentleman gets back to the debate on European affairs.

Daniel Kawczynski: I apologise, Madam Deputy Speaker, and I shall do so immediately.
	The European Union's priority should be helping small, vulnerable countries with illegal immigration. My friends who are Members of Parliament in Malta tell me that the country is being swamped by illegal immigrants from Libya. Many western Africans are coming to the ports close to the border with Tunisia, near Tripoli, and going across to Malta in a clandestine way. To my knowledge, we have not sent any immigration enforcement help to assist Malta in its struggle. We need to send patrol boats and assistance in sending people back. Malta needs us to put pressure on Tripoli to police its ports better. The Prime Minister has tried to improve our relations with Colonel Gaddafi and we should be using our position of influence. If the Prime Minister could manage to stop Colonel Gaddafi from going ahead with weapons of mass destruction, surely he can convince him to tighten up his ports to prevent illegal immigration into the European Union.
	Another problem is the Canary islands.

Graham Brady: Before my hon. Friend moves on from Malta, does he agree that Britain has a particular role to play in Malta and Cyprus, the other two Commonwealth countries that are members of the European Union? Before he moves on to the Canary islands, where other member states might have a role to play, does he agree that it would be nice to see Britain playing an especially strong role in countries with which we have an historical Commonwealth connection?

Daniel Kawczynski: I agree with my hon. Friend. The Maltese MPs made the point that they were somewhat disappointed that we, as a fellow Commonwealth country and that country's principal ally, had not taken a lead in the European Union to assist in that grave matter.
	Tens of thousands of west Africans are coming from Mauritania and Senegal to the Canary islands, which cannot cope. Many of those illegal immigrants will make their way to France or the United Kingdom, so there is no good saying, Well, of course this is not our problem, because it is. In a recent television documentary on illegal immigrants, many of them said that they were going to the Canary islands only as a way of getting to the United Kingdom, so we should be doing far more.
	The hon. Member for Luton, North (Kelvin Hopkins) made an interesting point when he said that controlling our borders was one of the critical ingredients of sovereignty. I estimate that illegal immigration is the biggest threat to our sovereignty. If a country cannot police its borders, it does not have sovereignty. Some of my colleagues say that the EU is the biggest threat to our sovereignty, but that is not the case. The biggest threat is not being able to police our own borders properly.
	Finally, I want to discuss a European country that has not been mentioned so far: Belarus.

Andrew MacKinlay: Great minds think alike.

Daniel Kawczynski: The hon. Gentleman and I have spoken about Belarus on many occasions. The west played a huge part in freeing the formerly communist countries of eastern Europe from tyranny. The BBC played a role by broadcasting to those countries in their own languages, showing them that there was a world outside communism in which people had freedom, managed to enjoy democracy and were not fearful of the secret police. That gave tremendous succour to the people of eastern Europe. They really appreciated it, and were extremely grateful to Great Britain and the BBC for standing up to communism and showing them an alternative. We need to do the same for Belarus. We need to broadcast to its people to show them that the tyranny of President Lukashenko is not inevitable, and to show them that they should aspire to democracy, and to joining the free countries of Europe. We should invite Opposition leaders from Belarus to London, and we should give university scholarships to Belarusians. Most importantly, political parties need to build bridges with Opposition parties and to help them financially in any way that they can.
	I come to the last part of my speech in which I will say something nice about the Labour party. Many Labour Members played a tremendous role in safeguarding democracy in Portugal in 1975. Some hon. Members may remember that, in 1975, Mario Soares was trying to install a new democracy after the military dictatorship in Portugal, and members of the international socialist movement ensured that that happened, by making repeated visits to Portugal, and by inviting Opposition leaders here. Callaghan, Wilson and many other others stayed close to Mario Soares, and they helped to nurture democracy in Portugal. The Labour party and other socialist parties across Europe played a fundamental role in helping Mario Soares to retain democracy in Portugal. My generation has a responsibility to do the same for the poor people of Belarus.

Charles Walker: Thank you for calling me to speak so early on in the debate, Madam Deputy Speaker. [Hon. Members: Oh!] That was said in jest. I shall give a fairly non-intellectual exposition of my concerns about the European Union. It is the natural position of a Conservative to be sceptical about large and grandiose projects, and I make no apology for being sceptical about the European experiment. I believe that we should have a Europe full of self-confident, strong nation states that are free to act in their own national interest, but also to work together when it suits them.
	Often, hon. Members who raise concerns about the European Union are shouted down for being little Englanders. I am not a little Englander, but a rather big Englander. This country has a heritage of thinking big, because we have always looked overseas for our future. However, we have never looked towards Europe, and while its countries were squabbling, we were off exploring new worlds, creating new opportunities for the country. We are a great trading nation that does not like the artificial confines of the European Union, and we have truly wide horizons.
	The EU experiment is increasingly seen as an exercise for the political classes that is far removed from the concerns of ordinary men and women asthey go about their daily business. There is a growing lack of accountability in Europe, and we Members of Parliament have some responsibility for that, as well as the responsibility to address those concerns. At each stage of the European experiment, when people raised their concerns, we just said, rather patronisingly, No, no; you are just seeing ghosts. It will never happen, but what was originally conceived of as a trading bloc is now moving into involvement in social and workplace legislation, and that is a far remove from what was originally conceived by the so-called founding fathers.
	The hon. Member for Birmingham, Edgbaston(Ms Stuart) showed that she really knew her stuff when she accused EU institutions of mission creep, because when grand institutions come into being, the first thing that they want is to grab even more power. The EU is its own worst enemy, because it constantly meddles and interferes. A classic example is its failing labour market model. European labour markets are not competitive, as they do not create jobs. We heard about the big ideas at the Lisbon summit of 2000. Delegates at the summit said that Europe should create 20 million new jobs by 2010they thought that just by talking about it, it would happen. However, not one new job has been created. Structural unemployment in France and Germany has not budged in the past two decades. While some countries, including the UK, have enjoyed economic growth of varying levels, Europe has remained stagnant. Far from wanting to adopt the UK model, Europe continues to look inward, persisting with failed labour market solutions. It has tried to foist its problems, including the working time directive, on us. What business is it of Government to tell people how long they should work?

Jeremy Browne: I have done some research on the subject. In 1980, EU nations produced 26 per cent. of global output, but by 2003, that had fallen to 22 per cent. The International Monetary Fund forecasts that it will be 17 per cent. in 2015, and perhaps as low as10 per cent. by the middle of century. Does the hon. Gentleman not think that that continent-wide malaise should be a priority for all EU members?

Charles Walker: The hon. Gentleman makes an important point, as it is about time that Europe stopped looking inward. It should stop talking about itself, and start looking outward. It is time that it realised that it faces huge global challengesI shall come on to that in a minute.
	We negotiated an opt-out from the working time directive which allows people to work more than48 hours a week, but the EU wants to take that away from us, lumbering us with a 35-hour working week. They want to impose more employment and social costs on employers, but there is a danger that that will drive yet more jobs to China and India. I sincerely believe that every time our equivalents in China and India troop into their Parliament they look at a picture of Brussels on the wall and say, Keep up the good work, guys. Thanks very muchwe'll have more of your jobs. Keep piling on the legislation.
	The UK should be far more aggressive in pursuing its own national interests. The time for tummy tickling is at an end. Too often, we go to Europe and make grand statements about how we will take on the gnomes of Europe, or whatever they are called. However, we roll over, they tickle our tummy, and we wag our tail. Once again, we get absolutely stuffed. While we are having our tummy tickled they steal our Pedigree Chum from under our noses. We are one of the largest contributors to the EU, so there is no harm in going to Europe and telling them that we do not like that, and that we are not going to do it. They will huff and puff, flap their arms and get into a frightful lather, but they cannot turn their back on one of their largest contributors.
	I do not wish to be churlish, as the UK has been successful in the past 20 years. The previous Prime Minister, John Major, and the present Prime Minister have done an excellent job of keeping us out of the dreadful single currency. Having stayed out of the euro, we are on the verge of becoming the pre-eminent global financial centre. Frankfurt and Paris have fizzled outthey do not pose a challenge to us, as they do not offer London any competition, provided that we stay out of the single currency. We have even begun to surpass New York. In fact, 30 per cent. of Europe's largest companies have their headquarters in the UK. That is a good start, but we need to do even more.
	Instead of ceding even more power to Brussels, we should start to take power back. It will be a great upset for the Government, but sooner or later the UK will elect a right-of-centre Government by voting Conservative. However, we could be constrained in our delivery of right-of-centre policies by European workplace and social legislation which, unless we are careful, will trigger a constitutional crisis in this country and a loss of confidence.
	As I said, the European Union spends far too much time talking about itself and to itself. In my constituency we recently had a delegation of professors visiting one of our secondary schools to see how we manage education in this country. They were not from Spain or from France. They were from China. Fantastic! My secondary school, John Warner school, is to offer Mandarin from next year. If my secondary school can recognise the opportunities that reside in China, so must we and, more importantly, so must our European Union partners, or they will be left behind.
	I shall give an example of the unintendedperhaps they were intendedconsequences of European regulations. I recently met the chief executive of one of my local hospitals. I asked why the hospital's performance had not improved. I said, You've had huge amounts of additional money. Where is it all going? She replied, Well, we have to pay our doctors 30 per cent. more and, because of the working time regulations, they are working 30 per cent. fewer hours. How can I increase productivity on that basis?
	That is what Europe does not understand. People can be paid more and work more, they can be paid less and work less, but they cannot be paid more and work less. That just does not add up. We have been getting away with it for the past 40 or 50 years, but the hard-working people in China, India and other emerging economies will not let us get away with it in the future. Clearly, I am causing great distress to the Minister's Parliamentary Private Secretary, who has left her place, but the situation that I am describing is the reality, which the hon. Lady's Chancellor recognises, as in his pre-Budget report he spoke a lot about China and India and not a lot about the European Union. Perhaps the message is getting through to him as well.
	In conclusion, I have greatly enjoyed contributing to the debate. We have an opportunity to forge a new relationship both with our European partners and with the emerging economies of India and China. It would be to our detriment and loss if we did not take advantage of that opportunity, because it comes once in a generation. If we miss it, it is gone.
	I was a little premature in my winding up. I conclude with one of the greatest scandalsthe common agricultural policy. France is an extremely nice place. I love going to France, I love French people, I love their wine and their culture. I love the fact that they are extremely difficult, and I like that. France is a nice place because the European Union, through the common agricultural policy, is supporting a totally inefficient agricultural sector. We are funding France's lifestyle.
	That may bring a smile to some people's faces, but it does not bring a smile to farmers in developing third world countries, whose products are priced out of European markets while we dump our subsidised products on their markets. It is unbelievable that we could all hop on a plane to Nigeria tomorrow and find tinned European tomatoes there. Nigeria does not produce any, because it is not financially viable to do so. That is a scandal.
	Great concern has been expressed about enlargement and the problems of Polish immigration to the UK, but I congratulate our new European partners on being expansive in their outlook. They have escaped the yoke of communism. They do not want to go back to regressive top-down regulatory pressures. They want to take advantage of the commercial opportunities out there. We should follow their lead. It is a sadness that at a time when our new European partners are looking outwards, the Governmentthis is just a mild criticismare tending to favour the more regulatory approach followed by some of our old European partners. We want a successful economy. We want high levels of employment. We want substantial wealth creation. As currently structured, the EU is a barrier to that, not a promoter of that aspiration.

Mark Pritchard: Having taken part in several European debates since I was elected to this House, I think that this has been the best to date. I congratulate Members on both sides of the House and hope that I keep up with them in my remarks.
	I should like to comment on Bulgaria and Romania. I have been to Bulgaria, which is a fine country, but not yet to Romania. The accession of those countries represents an important time for the European Union and, indeed, for the United Kingdom. Last week, I met the Romanian Immigration Minister and raised concerns expressed by many of my constituents about the number of economic migrants who might come to Shropshire and to this country as a whole. The Minister tried to comfort me by saying that she thought that most people leaving Romania would go to countries with warmer, sunnier climates, such as Italy and Spain. That may be so. Nevertheless, when the most recent accession countries acceded to the EU, the Government predicted, despite the Foreign Secretary's earlier denials, that 15,000 economic migrants would come to the UK. We now know that the figure is 500,000 and growing. The hon. Member for Aberdeen, South (Miss Begg) is not here today, but she has rightly observed that more than 10,000 Polish people have entered Aberdeen over the past year or so. In Shropshire, there are many hundreds of Polish people; no poll has been undertaken to ascertain precisely how many.
	Many of those people are contributing legitimately to our economy and have brought skills that we need. However, this needs to be seen in the contextof unemployment, which is at a seven-year high. Unemployment is going up and we have an inflow of economic migrants, so more people are chasing fewer jobs. We also see wage deflation in some areas of the economy, certainly in the agricultural sector in Shropshire, Herefordshire and other parts of the west midlands. If we are not careful, the very good community relations that this country has enjoyed over generations, for hundreds of years, could inadvertently be undermined. That would not be good for our nation, and I know that the Government do not intend that it should happen.
	Let me give the example of somebody who, two years ago, went for a factory job as a press operatora comparatively dirty jobbut then said, No, I'd rather not take it: I'll go and find a cleaner one down the road. Two years later, that job ceases, but they still have to pay their mortgage, with increasing mortgage rates, and to put bread on the table to feed their families, with rising costs of living. They go back to the factory where they turned the job down, where the manager says, I'm sorry, the job's taken. They look over his shoulder and see people from other EU nations doing the job that they need to pay their mortgage and put bread on the table. It is not an ethnic issue or a skin colour issuethere could be a white European in that job. One might say that that is the price we are paying for being members of the EU.

Geoff Hoon: The basic flaw in the hon. Gentleman's argument is that there are more people in employment in this country than ever beforeabout 29 million, as my right hon. Friend the Chancellor said in his pre-Budget report. The hon. Gentleman may be warning of some doom-laden future, possibly related to the prospect of a Conservative Government, but he is not dealing with the present situation.

Mark Pritchard: I thank the Minister for trying to realign my comments, but I do not accept that. The population has clearly increased from the turn of the century and, by definition, an increase in population means more people in work. Let me be helpful: unemployment has clearly decreased under the Labour Administration. However, today it is at a seven-year high. Let me give the Minister a specific exampleI know that he is keen on them. In Shropshire in the past 12 months, unemployment has risen by 36 per cent. Jobs are being lost not only in manufacturing but in the service sector.
	In the Chancellor's pre-Budget report statement, he rightly identified the problem and the challengewe need to upskill our labour force and educate our young people so that they are qualified and skilled for the modern workplace. The trouble with the statement was that it did not give a solution. Apart from rising unemployment and wage deflation, there is the problem of people from other countries coming in who have more skills, including language skills, are more versatile and are potentially more flexible about what they are prepared to do. That is the challenge for our indigenous population and for the Government's economic policy in the context of our discussion on European affairs.
	I would like some reassurance from the Minister about what the transitional derogation means in detail. As I understand it, for the Bulgarians and Romanians who enter the United Kingdom next year, any transitional derogation will last for only two years. After that, it will go to the European Commission, and the Commission, not the Government will have a say. That worries me and I would be interested to hear the detail.
	I have been to Turkey, which is a fine, ancient nation that is rightly proud of its history and heritage. However, I do not share the Government's position or, indeed, that of my Front Bench on Turkey acceding to the European Unionfor the time being. That is my get-out clause. It is not that I am unprepared to be principled and put my head above the parapet, but I believe that Turkey will not be able to do the things that it needs to do in the short, medium or long term. My position is therefore pragmatic as well asI hopeprincipled.
	I am worried about Turkey because it has a poor record on human rights and it has not made enough progress on religious freedom. It also needs to make more progress on Cyprus, including the embargo on Cypriot ships, the green line, property such as Famagusta in the north of Cyprus and the wider issue of property ownership in the north of the island. It would be an opportune moment for Turkey to recognise the Armenian genocide. Its continuing reluctance to state clearly that the genocide took place and that it was exceedingly wrong is disappointing. Turkey could also reinstate diplomatic relations and normalise relations with Armenia. Again, it has not done that to date.

Daniel Kawczynski: I am grateful to my hon. Friend and fellow Shropshire Member for giving way. Does he agree that Turkey needs to do far more about the rights of the Kurdish minorities in the south-east of the country before we allow it into the EU?

Mark Pritchard: My hon. Friend makes an excellent point, as ever, and I entirely agree with him. It is not just the Kurds; there is a whole range of ethnic minorities within the Turkish nation with which the Government of Turkey need to deal in a far better way than they do today.
	A further point on Turkey relates to safeguarding our national culture. Our Government sometimes describe Turkey as a secular nation; at other times they describe it as a Muslim nation. We should try to encourage democracy in Turkey and to buttress, support and strengthen it. We should encourage the moderate voices in that nation. However, the British Government's view of Turkey, as expressed in their foreign policy, should not be driven by American foreign policy. Yes, I understand America's strategic geopolitical and defence position of wanting Turkey to be westward facing rather than eastward facing, but Turkey is already a member of the customs union, and it benefits greatly from its trading relationship with the European Union. Even if the EU decided not to allow it to become a full member, I do not think that it would suddenly pull up the drawbridge and stop trading with other European nations. It would not cut off its nose to spite its face. Nor do I believe that it would turn eastwards towards the central Asian republics, because those republics are also looking westwards. Therefore, I believe that that is a false argument.
	We have heard todayeven from the Liberal Democratsabout supporting an independent British foreign policy. The issue of Turkey represents an opportunity to assert British independence in foreign policy outside of American strategic geopolitical interests. Some elements of the Austrian position on Turkey are right, and many of the points that Germany has made are correct. Even the French have been right about some of their concerns over Turkish accession.
	Another key issue is the free movement of people, should Turkey become a full member. With 15,000 people having come from the Baltic states and Poland in the most recent accessions, how many would we see coming here from Turkey? Would it be 15,000, or half a million, or more? How would that change our nation? Would it change our culture or our identity? Thisis not a criticism of or a slight on the Turkish people. I have Turkish people in my constituencythey are wonderful people who are fully integrated into the Shropshire community in which I live. However, this is a matter of making our own national culture and identityand, arguably, in extreme circumstances, our national securityparamount, and placing them above the interests even of those in the State Department in the United States.
	I also want to touch on the position of the Vatican, the Holy See, in relation to Turkey. His Holiness the Pope visited Turkey recently and it was claimed by some elements of the Turkish mediaand, indeed, the British mediathat he had changed his view about Turkey. It was declared that while he had previously not been keen on the idea of Turkey's accession, as a result of his visit he had endorsed proposals for its full membership. I understand, however, that that is not the position. I have checked this over the past 48 hours, and the position is that the Vatican is neutral on the matter. It is neither in support of nor against Turkey becoming a full member. It is important to put that on the record because some of the British media followed the Turkish media in getting that wrong. There is no endorsement from the Catholic ChurchI speak asa non-Catholicfor Turkey joining the European Union.
	We have heard some excellent contributions today on the European constitutional treaty. I would be interested to hear what the Government's position is on this matter because I am still confused, especially after the Home Secretary's reference this week to the constitutional treaty as a diseased dead parrot. I am not sure whether that was a misquote. Perhaps it should have read a deceased dead parrot, if it was a reference to the Monty Python sketch. While the treaty might be deadI say mightis it buried? As my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) said, there is talk of a mini treaty. However mini and compressed a new treaty might be, if issues of competency and sovereignty are involved the Government should allow this nation a referendum. It is time that we took powers back from Europe, rather than giving new powers to Europe.
	A couple of weeks ago in the House, I mentioned the charter of fundamental rights. Despite the treaty not having been ratified by all the nation states, some European Courts have referred to the charter of fundamental rights in cases over the past few weeks. Why is that happening? Is not that ultra vires? Is not it beyond their legal powers to make reference to a charter that has not been ratified?
	Why are offices apparently being purchased and personnel recruited for the external action service, the European Union's so-called diplomatic service? That was part of the treaty, and has not been agreed. What legal powers have been given for that to go ahead? Who is paying for the budget for that? We should retain our own diplomatic service and not have a common diplomatic corps. With the greatest respect to France, I do not think that a French ambassador representing European Union interests would necessarily always have the same foreign policy or even commercial dimension in mind when representing British interests or a British company in another nation. It is disappointing that we are closing diplomatic missions around the world, such as in Tonga and Paraguay.
	Britain needs to have an independent foreign policy, working closely with the Americans when it is right to do so, and working with our European partners when it is right to do so, but, first and foremost, putting national interests above all else.

Douglas Carswell: In the words of the French Institute for International Affairs, the EU faces,
	a slow movement onto history's exit ramp.
	According to the think-tank Open Europe, all long-term forecasts suggest that the EU is set to experience rapid relative decline. The European Union's own forecasts suggest that by 2050 its share of world GDP will nearly have halved. A report by Goldman Sachs shows that the EU's competitiveness will have been diminished by higher taxes and regulations. Ageing work forces and demographic downturns will mean deteriorating public finances across member states. Data from Standard and Poor's show an unmanageable burden on public finances for member states, with the exception of Britain.
	Why, then, is the default setting of the British foreign policy establishment stuck on closer integration with Europe? Why does the Foreign Office, which really decides our foreign policy, continue to push for more Europe? While China, India, the US and others benefit from increased competitiveness, the continent that industrialised first turns its back on the economic revolution that is happening beyond. Between the end of world war two and the 1970s, Europe, with relatively low regulation and tariffs, caught up with the United States. Since then, the EU has regulated and taxed itself to the point of stagnation.
	Europe's slow growth and stagnation are a consequence of dirigiste top-down integration, a pan-European system of regulation, government by remote bureaucracy and restriction of economic activity by unaccountable officialdom. Inward-looking fortress Europe creates high tariff barriers. The EU's overall tariff rate is high and harms the UK economy. It harms UK consumers and households, particularly poorer households. That is not just harmful to us; fortress Europe hurts Africa and the developing world as well. Goods from Japan, for example, face average tariffs of 1.6 per cent., but on average Malawi pays 12 per cent., Namibia 20 per cent. and Bolivia 26 per cent.

Charles Walker: Does my hon. Friend agree that although the European Union talks about fair trade, its actions are totally against fair trade?

Douglas Carswell: Absolutely. I think that the European Union is one of the biggest obstacles not just to free trade but to fair trade, and one of the biggest obstacles to the negotiation of lower tariff barriers. If politicians in this House want to help Africa, instead of making speeches that emote about it and posing for photographs, they might like to axe the tariffs. They might like to tackle the Foreign Office's obsession with European integration.
	Outside the European Union, with an independent trade policy made not by Mr. Mandelson's remote officials in the interests of protectionism but by Ministers accountable to the House, Britain could liberalise trade. We could open our markets up to Africa and the developing world. That might upset the career diplomats at the Foreign Office, but as a report by the think-tank Open Europe shows, it would be good for the British economy. It would be in our national economic interest.
	European integration has dictated our foreign policy agenda for too long. The Foreign Office establishment has gone unquestioned for too long. The challenges faced by the western worldthe rise of China and India, terrorism, the mass movement of peoplerequire some degree of international co-operation by national Governments, but they do not require supranationalism. Being in the EU means that instead of taking action to deal with real problems, successive Governments have sought to Europeanise responsibility. They have passed the buck to Brussels. That does not solve or address problems; it merely pushes responsibility on to remote and unaccountable technocrats.

William Cash: My hon. Friend may be about to deal with this point, but does he agree that one of the essential ingredientsand one of the most malevolent aspectsof the system is the existence of harmonised legal arrangements imposing requirements and obligations on individual countries, irrespective of the wishes of their electorates? That contributes to the problems that he has identified, for example in relation to Africa, which is why it is so appalling. The European Court of Justice, capping the whole arrangement, is a driving force behind those problems.

Douglas Carswell: My hon. Friend is absolutely right. An important fiat for closer integration is the judicialfiat of the European institutionsthe fiat of judicial activism.
	When those unaccountable technocrats take responsibility, politicians are able to create the illusion that they are responding without, in fact, taking action. I believe that the United Kingdom must withdraw from the European Union, because it is increasingly evident that it is in our national interest to quit.
	I do not consider reform of the EU to be a realistic option. The objective of every Government since we acceded to the treaty of Rome has been to reform the common agricultural policy. Despite three notable attempts, the Organisation for Economic Co-operation and Development estimates that reform has cut subsidy by just 1.5 per cent. Far from liberalising and achieving the Lisbon objectives, it has meant that EU rules and regulations have grown ever more prescriptive.
	The notion that we might reform the EU into something that it is in our national interest to remain part of is a fantasy. It is, I believe, the greatest Euro-myth of all. The EU cannot reform, because its institutions lack the democratic accountability and scrutiny that would drive them to reform. We often debate European affairs in the House, and there is much talk of reform. There is much talk of enlargement, the Lisbon agenda and qualified majority voting. It is so much hot air. It is time for the House to recognise what many in the country now recognise: the EU will not reform in the way that it should, regardless of enlargement. The Lisbon agenda will not be met. QMV will continue to make the continent sclerotic. When we debate European affairs we must debate the real issue: should we be in or out? I say we should be out.

Tobias Ellwood: I had not planned to participate in the debate, but I have been encouraged to do so by the excellent contributions from Members of various parties. I pay tribute to my hon. Friend the Member for Harwich (Mr. Carswell), who speaks with passion and knowledge about tariffs and other issues that affect the European Union. I hope that he understands that I do not necessarily share all his views, but it is nevertheless good to hear them.
	Much of our debate has rightly focused on the upcoming European Council agenda, although I recall the right hon. Member for Leicester, East (Keith Vaz) asking why Conservative Front Benchers were focusing on the constitution: as that is not on the agenda so we should not need to discuss it. The point is that the constitution and issues around it are unresolved business; if we looked at the minutes of previous meetings, we would see that it is outstanding business. It should be brought forward. However, we seem still to be in a period of reflection. We have heard time and again in the Chamber about the growing economic competitiveness of India, China, Brazil and other countries, and yet we still seem to be in a state of reflection. The constitution issue is fundamental to how we will go forward. What is the purpose of the European Union? What is it actually for? Such questions are still outstanding and they need to be resolved.
	Like many other Conservative Members, I am concerned about the balance of power between the United Kingdom and Brussels. The referendums in Holland and France showed that there is growing grass-roots concern elsewhere that there is an unaccountability in Brussels that is unacceptable and that powers should be returned from that central unit to the sovereign states. When it was devised, the whole purpose of the EU was as a trading platform not a political programme, but that is what it has turned into, and it has done so without any checks or balances. We are not addressing such accountability issues despite the fact that we now have the opportunity to do so, as there is an absence of anything concrete coming forward because the constitution has been hit into the long grass.
	I intervened on the Foreign Secretary to point out that there is a concern about value for money. A lot of UK Eurosceptics could at least feel a little warmer about the concept of the EU if the waste of money aspect were addressed, and that would be simple to do. There is still the ridiculous situation of our having two Parliament buildings. We have a tentative idea that the Government are looking into that, but for how long do they need to do so? There are two Parliament buildings, and every time that all the MEPsalong with the whole caboodleget on the gravy train and move from one side of Europe to another there is a complete waste of money. Let us get rid of Strasbourg; let us do that today. That would give the people of Britain a strong message that we would like to save money.

Geoff Hoon: I hate to give the hon. Gentleman a couple of history lessons, but I am forced to do so. First, he might recall that the origins of the EU are in the European Coal and Steel Community, an avowedly political project to prevent conflict between France and Germany at the end of the second world war. Secondly, the problem faced by all Governments who wish to address the issue of the buildings of the European Parliament was caused by the previous Conservative Government, who agreed that Strasbourg be a legally required site of the European Parliament. As to change that would require unanimity, I am less interested in the hon. Gentleman's rather casual observations than in how he proposes to persuade 24 other countries to end that situationincluding France, which happens to be one of those countries and where Strasbourg is located.

Tobias Ellwood: On the right hon. Gentleman's first comment, he makes my point for me: the organisation was a trading platform and we should endeavour to go back to thatthat is what I am suggesting that we do. Instead, it has taken on a political dimension; it has morphed into something quite different from what it started out as. On the second point, he is absolutely right that France is holding that up, but I do not see the British Government jumping up and down and pushing France and asking other countries to join us in saying, What a waste of money that is.
	Let me move on to what the EU could do.  [Interruption.] I should be grateful if the Minister for Europe listened. I thank him for doing so. The EU could play a very positive role in the reconstruction and development efforts in Afghanistan. He will be aware of the lack of co-ordination between the United Nations, the EU, the Department for International Development, the USA and the myriad non-governmental organisations in that country. There is no single overall co-ordinator with the authorisation to knock heads together and to move the reconstruction efforts forward. That is one area in which the EU could actually play a very positive role. I was saddened to discover during three visits that I paid to Afghanistan in the past year the mess that is being created because international agencies are unable to co-operate and work together. Huge sums are being wasted. Yes, there are some successful small projects, but given the scale of operation required to move Afghanistan forward, the EU could play a leading role, bearing in mind its power and organisation.
	I turn finally to the balance between the EU as a security element and NATO. NATO has served us well in the past 50 years, providing the umbrella of security that Europe so needed. Unfortunately, there are elements within the EU that would like it to create its own security force, which would be absolutely wrong. I want the Government to confirm that they will commit themselves to NATO's long-term future and not allow an EU-style security force to grow in conjunction with it. The Minister for Europe might say that the two forces could work side by side, but I put it to him that that cannot happen. The EU security forces that are already in existence are double-hatting with NATO operations and overlapping them, thereby causing confusion within the military structures. That needs to change, and we need to recommit ourselves to what NATO is actually for.
	Britain has a proud history of standing up where other countries have remained quietof taking the initiative politically, diplomatically or indeed militarily, when other countries have stood on the sidelines. The EU is going down a river and nobody is willing to grab the rudder. Britain has a prime opportunity to take advantage of thatto show some initiative and provide a new direction for the EU that is worthy of all sovereign states, not just Britain.

Andrew MacKinlay: If the Minister for Europe, my right hon. Friend the Member for Ashfield (Mr. Hoon), ever forms a Government, I hope that he will remember that I was alongside him when it really mattered, bearing it in mind that attendance on the Government Benchesapart from my right hon. Friend the Member for Leicester, East (Keith Vaz)is somewhat lean. I have a serious point to put to you, Madam Deputy Speaker. I have been attending a Foreign Affairs Committee meeting, and a meeting of the European Scrutiny Committee was also taking place. When the party managers choreograph our Parliament, they should hold discussions with the Chairmen of the Foreign Affairs Committee and the European Scrutiny Committee to see whether such clashes can be avoided. Some Members want legitimately to be in both places; however, even the Almighty found it difficult to be in two places at once.
	There is a particular reason why I want to speak in this debate. When I made my maiden speech here nearly 15 years ago, I spoke about the prospect of Poland, Hungary and the Czech Republic joining the European Union. I could tell from Members' body language that they thought that I was completely off my trolley. However, it is amazing how people rewrite history. Not many will own up to having said that my notion was fanciful and unrealisticindeed, some said that it was undesirablebut that was the reaction across the political spectrum at that time.
	We should rejoice at the fact that Poland, Hungary, the Czech Republic and other countries have been brought into the European Union. I say that because it is proven that the EU is one of the greatest vehicles for conflict resolution and minimisation. I proudly proclaim in this place and outside it, to any audience, that I am pro-European for that reason. I believe that the project was important politically, commercially and economically, but it also had a moral dimension. Of course, the fact that countries such as Polandto which others have also referred todayare in the EU is a political act. Joining was extremely important to them, as a ratchet against the totalitarianism that they had endured for so long. This Labour Government can take some pride in that, whatever else might be on their record.  [ Interruption. ] This Government can and should be proud of their role in EU enlargement, for which they argued in the Council of Ministers and elsewhere.
	Opposition Members say grudging things about the many entrepreneurial and enthusiastic young men and women who are attracted here from central Europe, but they may speak otherwise at election times. Those people are entitled to be on the electoral register at the next general election, and I intend to ensure that they are able to vote for the party that allowed them to come here and contribute to our economy from day one. Moreover, they will be able to vote against those people who say different things to different audiences and who have been so grudging about their arrival in this country, even though they brought with them both enterprise and much needed skills and labour.

Mark Pritchard: rose

Keith Vaz: rose

Andrew MacKinlay: I see that I have rattled a few cages. I give way first to the hon. Member for The Wrekin (Mark Pritchard), and then to my right hon. Friend the Member for Leicester, East.

Mark Pritchard: I thank the hon. Gentleman for giving way. Will he express the same passion to the Minister in respect of ensuring that the votes of members of Her Majesty's armed forces are counted at the next election, as well as those of new EU members coming to this country?

Madam Deputy Speaker: Order. That goes a little wide of the motion.

Andrew MacKinlay: Thank you, Madam Deputy Speaker. I would not have given way to the hon. Member for The Wrekin if I had known that he would abuse my generosity. I think that there is a moral dimension to the expansion of Europe, and I am proud of Britain's role in that.
	I give way to my right hon. Friend the Member for Leicester, East.

Keith Vaz: I thank my hon. Friend for giving way.He has spoken with passion on this issue for the past15 years, but does he agree that it was unfair of the Government to impose restrictions on Romania and Bulgaria? The accession eight countries have proved that registration and the operation of the market mean that those who want to work will get jobs, and that those who are unable to find a job will return home. Should we not review the policy in respect of Romania and Bulgaria to ensure that countries joining the EU do so on an equal basis?

Andrew MacKinlay: I would not put the matter in quite those terms, but I broadly agree with my right hon. Friend. I do not believe that we have anything to worry about with Romania and Bulgaria, who will join the EU just after Christmas.
	Earlier, I heard an Opposition Member go on about Polish workers. His remarks aggravated me, and I decided that I should repeat and place on the record something that a number of employers have told me. It seems that Polish workers have some peculiar characteristicsthey turn up on time, and are enthusiastic for the work ethic. Those attributes are much needed in this country.
	I believe that we have lost sight of the fate of the former Yugoslavia. I have not heard any mention of the region in the time that I have listened to the debatethis afternoon, but I hope that my right hon. Friendthe Minister for Europe will talk about the final negotiations on the status of Kosovo in his winding-up speech.
	I believe that the Kosovo talks should pursue what is usually called a Hong Kong plus solution, which would mean that Kosovo's final status would not be resolved this year. The enduring fiction is that Serbia and Kosovo are one country, when in fact it is clear that they are covered by two different jurisdictions. I do not want to get bogged down in a discussion about Serbia's de jure geographical position or Kosovo's independence but, under the formula that I propose, it might be possible to bring both territories into the EU.
	I am aware that there would have to be some collaboration with the war crimes tribunal, but EU membership for Serbia and Kosovo would be in our interests, if it could be achieved. There would also be ramifications for any refugees who might be created if there were to be a return to conflict in the area.
	We should take the initiative on Montenegro, a small country with a population twice that of the London borough of Wandsworth, and bring it into the EU. Some of the traducing of Montenegro is similar to what we used to hear about Slovakia and Malta not so long ago, but which we do not hear now. I do not accept all that business about it being a dodgy area with organised crime. If we brought Montenegro into the EU, it would be a signal to Serbia and other countries in the region that we also want to attract them to the Union.
	The EU is a great vehicle for conflict resolution and conflict minimisation, so we should be proactive in discussing EU enlargement with those states. I am conscious of the legitimate argument that the EU needs time to digest its rapid expansion over recent years, but we should go the extra mile for states that were part of former Yugoslavia and bring them in as expeditiously as possible.
	I depart from the Government on another point and would counsel them to listen to me for once, because during my years in this place I have noticed that things I have said that were dismissed from the Dispatch Box have come to pass on more than one occasion, although I will not list them now. The Government should reflect on the teasing of Turkey. There is no such word as never in politics, but Turkey will not be able to join the EU in the proposed time scale. It is wrong to tease Turkey; candour would be much friendlier and better for international politics in the long term. It would be much better if we said Turkey could not come in.
	My reasons for saying that are not those that have been canvassed elsewhere. I do not care which religious faith is practised in a country. I do not lie awake at night worrying about the geographical composition of Europe; after all, Hawaii is not part of the American land mass. Those things are not important. We need to consider two things with regard to Turkish membership of the EU.
	First, does Turkey meet the Copenhagen criteria? It is nowhere near them, so we should not be advancing its candidacy for that reason alone. Candidates should demonstrably meet the criteria: a robust parliamentary democracy, an independent judiciary, due regard for minorities in their constitution and practices and so on. Those criteria do not prevail in Turkey, so its candidate status should not be advanced.
	In fairness, Turkey can do nothing about the second objection to its membership, but when people join a club, they have to be accepted in their totality. Turkey is a large land mass, which has common borders with Armenia, Iraq, Iran and other friendly countries.

Simon Burns: Syria?

Andrew MacKinlay: Indeed. If Turkey joined the EU, its borders with those friendly states would be our borders, too. It is impossible for Turkey to police those borders robustly, with controls of the standard we require from Poland and will require from Romania and Bulgariaour new neighbours. That situation is unfortunate, but we must be realistic about the fact that Turkey is a large country and has borders with the states to which I referred. I find it incredible that we should advance the candidacy of a country that actually occupies part of EU territory. That is a matter of legal fact, as northern Cyprus is the territory of the Turkish Republic of Northern Cyprus, but also territory of the EU, so I find it inconceivable that we should be negotiating membership of a country whose occupation of another country still endures.
	Finally, I want to pick up on a point about Malta, which was raised by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) a little while ago. Malta is currently enduring great problems as a result of mass migration from north Africa, with immigrants coming in particularly from sub-Saharan Africa. It is unfair that Malta has to cope with this growing and disproportionate influx of illegal immigration, and it is demonstrably a European problem that the Council of Ministers needs to deal with urgently. I hope that the Minister will announce a revisiting of the Dublin convention, as there needs to be a comprehensive discussion among European member states of how to share the burden of the illegal immigration that is unfairly hitting Malta. The need for dispersal should be recognised and there should be a common policy for dealing with the problem.

William Cash: One of the reasons why those immigrants are going to Malta is that the country is in the EU, so it is a stepping stone. The hon. Gentleman will appreciate that that is part of the problem. The fact that Malta is part of the EU makes it a stepping stone to other parts of the EU. As I say, that is part of the problem. I have just been there.

Andrew MacKinlay: Actually, I know where Malta is as I sometimes look at maps. What the hon. Gentleman says is demonstrably so. Malta is part of the EU and the EU should recognise it as a problem to be shared. For that reason, I invite the Minister to confirm that the Dublin treaty, which relates to the problem, will be revisited expeditiously.

Geoffrey Clifton-Brown: Ithas been an excellent debate, in which we have heard13 speeches. The hon. Member for Thurrock (Andrew Mackinlay) was the unlucky 13th, but he delivered an excellent, witty, off-the-cuff speech. The House was privileged to hear it; it was well worth waiting for. I should apologise for the fact that my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) is not in his place. He is currently visiting Pakistan, as the Minister knows, so he is unable to be here this evening.
	I am delighted to see the Minister for Europe in his place. A month ago at Foreign Office questions, we were all slightly worried that he had taken the vows of a Trappist monk, not being allowed to speak on Europe. So worried did I get that I took up the matter further with the Prime Minister at Prime Minister's Question Time. On 1 November, the Prime Minister said:
	What my right hon. Friend is doing on behalf of this country in Europe is absolutely excellent.[ Official Report, 1 November 2006; Vol. 451, c. 295.]
	Obviously, relations have been repaired, as he went off to Riga and is in his place tonight answering this debate. We are delighted to see him and even more delighted than usual as I gather it is his birthday [Interruption.] No, I am not going to say how old he is; he would not want me to do so.
	The Foreign Secretary correctly summed up current European challenges when he defined them at the Finnish embassy lunch on 28 November as
	counter-terrorism, climate change, nuclear proliferation, jobs and growth in a globalised world, organised crime, drugs, securing the energy we need to power our economies.
	I doubt whether anyone could have summed them up better than that, but we have had 13 excellent speeches today so I shall try to mention some of them.
	The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) spoke at length about the carbon emissions trading scheme. I totally agree that we want to make that scheme work. We want to ensure that it works fairly towards British companies and that other companies, as my right hon. Friend the Memberfor Wokingham (Mr. Redwood) said in a timely intervention, do not issue too many permits, thereby forcing our companies to purchase them at an excess price. I also wholly agree with the hon. Member for Newcastle upon Tyne, North about the need for a forward-looking EU policy on biofuels and clean-coal technology, which will be vital in future if we are to reduce our carbon emissions.
	We then heard from my old friend the hon. Member for Stone (Mr. Cash), and I agree with him that the EU affects a vast amount of our constituents' livesit certainly doesand that EU policy on co-operation is being tested in a number of areas of the world, not least in Iraq, the middle east and Sudan, and we need to co-operate more closely with them on that. His amendment to the Legislative and Regulatory Reform Billwhich, as he said, was supported by Conservative Front Bencherswas an innovative solution to which, I am sure, we will wish to return.
	The hon. Member for Birmingham, Edgbaston(Ms Stuart), who, sadly, is not in her seat[Hon. Members: She is.] Oh, she is. I am very sorry. She has moved seats, and I apologise to her. Of course, she did an excellent job on the convention last year. She mentioned the very important problems of Kosovo, which the hon. Member for Thurrock has just mentioned, and the possible implications for Russia of the independence movements in the Caucasus states. We all need to concentrate carefully on that very important issue.
	The hon. Lady mentioned the European Defence Agency, as did a number of other hon. Members, and I want to say something about it this evening. I do not agree with her. When NATO secured the peace all through the cold war; when NATO played a major part in Kosovo and elsewhere in the Balkans to secure the peace; when we have been invited into Afghanistan, under a United Nations resolution, to try to secure peace, infrastructure building and democracy; and when some European countries are not prepared to play their full parteven if they do play their fullpart, they do not do so with the flexibility of troops needed by the commanders on the groundI do not understand in those circumstances why we need a separate European Defence Agency. As has been mentioned, when most European countries spend less than, or about, 1 per cent. of the gross domestic product on defence, the problem is that they need to spend more on defence, so that we can share the burden of defence more equally than we do at present.
	My hon. Friend the Member for West Suffolk (Mr. Spring) made one of the most telling speeches in the debate. Of course, like other hon. Members, he was very supportive of EU enlargement. The Conservative party is particularly keen on enlargement, and many Members have spoken either in favour of or against Turkish membership. I want to say one or two things about Turkish membership. Turkey is, of course, a very large country, with a population of about 80 million, which is set to grow towards 100 million in the near future, and we all recognise the immigration problems that that could create. We all recognise the problems that Turkey has with different religious and political minorities.
	We recognise the problem of the green line in Cyprus. I visited Cyprus earlier this year. As my hon. Friend the Member for The Wrekin (Mark Pritchard) said, we recognise the difficulty of property rights in northern Cyprus. Of course we wish to see Turkey making progress on entry into the ports and airports in the north of Cyprus. All those things are difficulties; but as I said in an intervention on my hon. Friend the Member for West Suffolk, if having encouraged Turkey to open negotiations, the EU were to turn its back on Turkey and as a result it became an Islamic state, the whole EU would rue that day. We must be very careful about that.
	The hon. Member for Luton, North (Kelvin Hopkins)I regret that I was not here when he made his speechsaid that regional PR led to risky euro-enthusiastic MEPs. That may well be the case, and it may well be that we do not like the PR system and the open list system for elections to the European Parliament and we wish that the European Parliament had better scrutiny of the Commission's affairs, but the European Parliament is nevertheless some form of democratically elected body.
	I totally agree with my hon. Friend the Member for Windsor (Adam Afriyie): we want the EU to be an open, trading non-bureaucratic body. We want it to succeed in world trade. As the Chancellor said today in his pre-Budget statement, we must look outwards to the rest of the world. We must look at what is going on in China and India and in the countries of the Association of South East Asian Nations. I attended the ASEAN gala dinner on Monday, and it is delightful to know that Asia-Pacific Economic Co-operation is getting together in VietnamVietnam of all countries, one of the most suppressed countries in the world emerging on to the world stage. Those are the challenges that the EU must face.
	My hon. Friend the Member for Shipley (Philip Davies) made his traditional call for withdrawal from the EU. I have to say to him, in the gentlest and nicest termshe is a good chapthat that is not official Opposition policy. We want to work within the EU. We want to see a reformed EU; but we do not wish to leave the EU. Let me tell him why. The EU has been amazing in embracing some of the most oppressed countries in the worldsome of the former Commonwealth of Independent States countries. The whole EU, including this country, has benefited from the enlargement of the membership of the EU. NATO has benefited from the increased membership of the Baltic states, Ukraine and others.
	My hon. Friend the Member for Broxbourne (Mr. Walker) was also sceptical about the European experiment. We all have reservations about the European experiment. He talked about mission creep, and meddling and interfering. I have that fear about the new human rights body in Vienna. Human rights should be a matter that each individual state is proud to uphold and to have an excellent record on. We do not need an overarching body to tell us what to do in that respect.
	My hon. Friend the Member for The Wrekin graphically described some of the problems of Turkish membership. I have mentioned that. He also looked forward and considered what might have been in relation to the European constitution. With the advent of the French and the Dutch referendums, let us hope that the constitution is well and truly buried. I hope that, when the Minister for Europe sums up, he will tell us something about that. I entirely agree with my hon. Friend: we do not wish to see an external diplomatic service. We want to see the Government keeping British embassies open throughout the world and having the highest standards of ethics, morals and effectiveness. The British diplomatic service has been renowned for that in this and the last century.
	My hon. Friend the Member for Harwich (Mr. Carswell), in the sort of robust speech that he is renowned for, pointed to the fact that there are much higher tariff barriers for some African countries. That is a real worry. It is a real concern in terms of the failure of the WTO Doha round of trade talks. We all want to see progress on the Doha round. The Government could do more to press their friend the Trade Commissioner to make sure that we are not continually protecting agricultural subsidies and farmers who are not competing in the real world. I say that as a farmer myselfI have declared that in the Register of Members' Interests.
	It is shameful that the APEC countries that met in Vietnam last week said that they were prepared to break the deadlock on the WTO round provided that others did the same. The European Union could have done more. A successful Doha round, as my hon. Friend said, would be of enormous benefit to some of the poorest countries in the world. We should not shut them out from our markets. That is what is happening in far too many casesby means not just of tariff barriers, but of non-tariff barriers and a whole range of other bureaucratic mechanisms for keeping them out of our market.
	My hon. Friend the Member for Bournemouth, East (Mr. Ellwood) made a typically robust speech. He, too, mentioned the problems of NATO and a separate European defence agency. I thoroughly agree with him.
	It has been a great privilege to sum up in this debate. The EU has expanded from the original six members when we joined it in 1973, to nine as it was then, to27 nowlooking forward to 30 with the advent of Croatia, Montenegro and Turkey. It is a very different Union from the one that existed in the original days of the European Economic Community. We need to look for continual reform. We look for inspired leadership. When the Prime Minister came to office, he said that he would give us that inspired leadership as far as Europe is concerned. We are still waiting. We very much hope that, at next week's summit, he will show some of that inspired leadership and make sure that the European Union is pointed in the direction that we want to see it go ina full, open, non-bureaucratic, trading organisation that creates employment and wealth for its citizens.

Geoff Hoon: May I begin by expressing my appreciation to the hon. Member for Cotswold (Mr. Clifton-Brown) for his good wishes? I clearly could not think of a better,more satisfying way of spending the first day of my 54th year. The debate was obviously specially arranged for me by the Whips Office. It reminds me a little of those childhood treats, such as going to the cinema or the zooactually, I should not dwell on going to the zoo.
	We have had a valuable debate. The focus, quite rightly, has been overwhelmingly on how all member states can get the most from their contribution to the European Union, how we in the United Kingdom can ensure that the EU is working for the people of Britain, and how we can play our part, with others, in steering the EU in the right direction. Above all, that flows from a recognition that the European Union is central to much of what we in this country want to achieve on a wide range of policies, including environmental protection, climate change, energy security and development. The Government are playing a leading role in the European Union to ensure that we can respond effectively to the political challenges of the 21st century.
	Cross-border problems cannot be solved by little Englanders pretending to be able to act in isolation from the rest of Europe, as too many Conservative Members would have us believe. The Leader of the Opposition's rhetoric on the importance of tackling climate change is hopelessly inconsistent with his approach to Europe. Indeed, I am curious to know whether the hon. Member for Altrincham and Sale, West (Mr. Brady) could at any time enlighten us about his actual policy on Europe, or even tell us whether his party has a policy on Europe. It is a shame that the hon. Gentleman is not an English batsman because he is able to talk at great length without giving anything away. At no point during the course of his rather long speech did he reveal any aspect of what is positively his policy. Again, as far as I could detect, his policy appears to be something of splendid isolation. Perhaps we should reflect on the fact that one of his colleagues described him as a good negotiator, although there was no evidence that he wanted to discuss anything. As far as I could detect from his speech, Conservative party policy on Europe is just say no.
	I can reveal to the House, perhaps exclusively,that the Leader of the Opposition, after more than12 months in that position, has decided to make his very first visit to Brussels. The right hon. Gentleman might need some assistance as he wanders the corridors of the European Parliament. It would be a shame if he got lost and found himself in a meeting with his natural political ally, the United Kingdom Independence party. It would be interesting to know whether he plans to meet his actual political allies from the European People's party, whose mission is to work for the
	realisation of the United States of Europe.
	The right hon. Gentleman's programme includes a meeting with the European Commission President, Mr. Barroso. During a recent trip to this country, Mr. Barroso praised the Government for their achievements during the UK presidency last year and stated:
	Britain is a lead player in Europe.
	He also said:
	Does the UK want to continue to drive from the centre; or return to sulking from the periphery,
	and it seems to me that he was unconsciously referring to the Conservatives' approach to Europe.
	Let me deal with several of the points that were raised in the debate. I congratulate my right hon. Friend the Member for Leicester, East (Keith Vaz) on his speech. He spoke with his usual skill and eloquence about enlargement and decision making in the European Union and the Lisbon agenda. The hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore) started his speech by reviewing current issues and recent speeches. I was delighted to discover that he reads the speeches made by both my right hon. Friend the Foreign Secretary and me with such obvious interest and enthusiasm. With the Christmas recess coming up, I am sure that we can offer him some entertainment as he wiles away the hours between debates on Europe.
	My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) asked several detailed questions about climate change. If he will allow me, I will write to him with detailed responses. However, as I made clear in my observations about the Leader of the Opposition, if the right hon. Member for Witney (Mr. Cameron) genuinely believes in tackling environmental problems, he must genuinely believe in engagement with the European Union, because it is only through the European Union that it will be possible for this country, working in partnership with other European countries, to develop energy policies that are in line with climate change objectives. His position simply does not make sense. No one would believe a political party that pretended that it was somehow possible to tackle such problems in splendid isolation.

Graham Brady: I am sorry to interrupt the Minister on his birthday, and I hope that he enjoys the rest of the evening more than he enjoyed this afternoon. We have been very clear: we have no difficulty engaging with our EU partners to tackle climate change, and I referred to that in our opening speech. We are also clear aboutthe fact that we do not need additional EU competences to do that. He agreed with me on that point on 26 October when I challenged him on the subject, and the Foreign Secretary agreed with me on the subject yesterday in Foreign Office questions.

Geoff Hoon: The point that the hon. Gentleman misses about his approach is that in any international organisation such as the European Union it is simply not possible to pick and choose, although he pretends that it is. It is necessary to be engaged, to debate and discuss, and to argue one's cause. That does not mean always saying no on a range of issues, but that is the impression that he gives. I have listened to him on a number of occasions, and he speaks well, effectively and at length, but he does not say anything about the Conservative party's policy; I would be delighted to hear what it is.
	Several other Conservative Members contributed to the debate. I apologise to the hon. Member for Stone (Mr. Cash) because I was not in the Chamber during his speech, but I suspect that I have heard it many times before. I am sure that he spoke with his customary style and enthusiasm on the issue of Europe. My hon. Friend the Member for Birmingham, Edgbaston(Ms Stuart) asked when Kosovo would join the European Union. She is right to emphasise that there is a clear European perspective on the Balkan region, including both Kosovo and Serbia. Their European position will be a key factor in ensuring their economic development and, indeed, their shorter-term stability. Obviously, it is important to wait for the conclusion of the UN-led process to determine Kosovo's final status, and we cannot speculate at this stage on its prospects for membership of the European Union, but the western Balkans are a vital part of Europe and it is important that that ambition remains open to countries in the region.
	The hon. Member for West Suffolk (Mr. Spring) spoke at length on a number of issues. He emphasised the importance of the relationship with the European Union, mentioning countries such as Ukraine, Moldova and Belarus. I hope that he accepts that one of the EU's singular achievements during the period of enlargement has been to offer a focus, goal and ambition for countries that were formerly part of the Warsaw pactand, in some cases, formerly part of the Soviet Union. Without that focus and ambition, they could easily have drifted away from democracy, the rule of law and free markets. I am sure that we will all celebrate that singular achievement of the EU next March.
	My hon. Friend the Member for Luton, North (Kelvin Hopkins) said, if I understood correctly, that Eurosceptic voices needed to be heard because there must be a better balanced and more informed debate. Having sat through most of this debate, I cannot agree that more Eurosceptic voices are needed. My hon. Friend the Member for Thurrock (Andrew Mackinlay) probably put things a little better, as there was rather less support for the pro-European view than the phrase a balanced debate would suggest.
	After those speeches, a number of Conservative Members spoke, taking various approaches. If they will forgive me, I shall not go through each of their speeches in detail, although I listened to each and every one of them. It is an interesting characteristic that, with the singular exception of the hon. Member for Shipley (Philip Davies), they avoided saying what they believed. They criticised the European Union without saying what they would put in its place, or indicating which other countries in the European Union might share their view. At least the hon. Member for Shipley had the courage of his intellectual convictions and said that he believed that the United Kingdom should withdraw from the European Union.

Charles Walker: For the sake of clarity, I should point out that the Minister misunderstood me. If anything comes forward from the European Union that this country does not like, we should say, No, we're not implementing it because it is not in our national interest. Is that clear enough for him?

Geoff Hoon: I was speaking more about references to Britain needing a different relationship with the European Union. I made notes, and I think that that point was made by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski). The hon. Member for Broxbourne (Mr. Walker), in his comic-book description of the situation, talked of the need for a new relationship. I do not argue that our relationship with the European Union will remain fixed and consistent, but it is important that Opposition Members can articulate what they would like, by way of a new structure and situation. That is what the hon. Member for Altrincham and Sale, West consistently fails to do.

William Cash: rose

Geoff Hoon: I may regret it, but I shall give way to the hon. Gentleman.

William Cash: I have battled with the Minister on the subject since 1990 or earlier, but it is quite amazing to hear him say so, as he and the Government do not have the faintest idea of what kind of Europe they want. The Prime Minister has said that we cannot implement only part of the treaty, and the Government are not even prepared to put the treaty to a vote in the House of Commons this year, as such a proposal was not included in the Queen's Speech.

Geoff Hoon: The difference between our respective positions is that I have consistently supported the European Union. To change the EU, we must argue constructively and positively. I have never been entirely sure what the hon. Member forI have forgotten his wretched constituency [Interruption.]Stone believes. He referred to the time that he opposed his Front-Bench team, but in recent years the one thing on which I have congratulated him is the fact that he has steered them in the direction in which he believes.

Geoffrey Clifton-Brown: The Minister criticises Her Majesty's official Opposition for not having a policy, but we have a very clear policy on the European constitution. Will he rule out in the House the Government acceding in any circumstances to that new constitution?

Geoff Hoon: The Government have a very clear policy on the European constitution and I have set out ina written ministerial statement, agreed by the Government, the basic principles that will guide renegotiation. Again, that demonstrates the difference between us. As I pointed out to the hon. Member for Altrincham and Sale, West, the Conservative idea of negotiation is to say no. That is the only policy that we have heard from them. In any negotiationI have negotiated throughout my career, both as a lawyer and as a politicianit is necessary to accept certain parts of the subject on which one is negotiating. If one does not do so, one is not negotiatingone is simply sitting in a corner, isolated, with no one taking any notice. That is pretty much what the previous Government did, and that is why they failed to deliver for Britainsomething with which the hon. Member for Stone used to agree.

Ian Davidson: Is it correct to summarise the Government's position by saying that whatever comes out of Europe, they simply say yes?

Geoff Hoon: On one's birthday one can reflect on such things, and the hon. Member for Stone has consistently taken that view. My hon. Friend has consistently subjected me to friendly fire for many years, but I do not accept his description of our position on the EU. It is vital, in trying to negotiate in the UK's best interests, that we accept certain aspects of the EU. I hope that he agrees that since those days in the early 1990s, to which the hon. Member for Stone referred, the Conservative party has undergone an incredible transformation. If today's debate is anything to go by, and if the Conservative Back Benchers who spoke represent their party's views, I sympathise with the Front-Bench team because they are in splendid isolation. They received very little support for their policy, as speaker after speaker stood up to say how concerned they were about their views.  [ Interruption. ] No one stood up on this side of the House, which is a sign that Government Members strongly support the policy that we are carrying out.
	The hon. Member for The Wrekin (Mark Pritchard) made a thoughtful speech. One of the difficulties from which Opposition Members suffer is their characteristic view that Europe is separate from the United Kingdom. It is vital when engaging in a negotiation to define terms properly. We have a huge role to play in Europe through the Council of Ministers, our Commissioner and our Members of the European Parliament. Only if we engage through those institutions of the European Union will we be able properly to protect the interests of the United Kingdom. That is the key issueto make sure that the British Government stand up for the interests of the United Kingdom. That cannot be done
	 It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

PETITIONS

The Myelin Project

Tom Levitt: I present a petition to the House on behalf of the Myelin Project, a national and international organisation supporting the needs of children with a genetic condition whereby their nervous tissue deteriorates, which often leads to an early and untimely death.
	The petition reads:
	To the honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled,
	The Humble Petition of Dr. Belle Humphrey, parent, and others of like disposition
	Sheweth
	That the Petitioners are parents of terminally ill children from rare hereditary and otherwise terminal (if not detected asymptomatic) Leukodystrophies; or family and friends of said children.
	Wherefore your Petitioners pray that your honourable House shall urge the Department of Health to introduce Universal Newborn Screening for Leukodystrophies and other like hereditary diseases.
	And your Petitioners, as in duty bound, will ever pray, c.
	 To lie upon the Table.

Alzheimer's Society

Joan Walley: I present a petition to the House signed by people from north Staffordshire who want to see their local primary care trusts and the National Institute for Health and Clinical ExcellenceNICEfocus on treatment and support for those in the early stages of Alzheimer's disease and dementia. It is important that doctors have the flexibility to treat people in the early stages of the disease. My constituents and their families want to acknowledge that.
	The petition to the House of Commons
	Declares that the Petitioners object to the decision to deny life-changing drugs to thousands of people with Alzheimer's at a saving of just 2.50 a day.
	The Petitioners therefore request that the House of Commons urge the Secretary of State for Health to ensure that doctors continue prescribing treatments in the best interests of their patients.
	And the Petitioners remain, etc.
	 To lie upon the Table.

LOCAL WASTE PLAN (SURREY)

Motion made, and Question proposed, That this House do now adjourn. [Liz Blackman.]

Paul Beresford: Thank you, Mr. Speaker, for the opportunity to hold this Adjournment debate. I also thank the Minister, whom I am delighted to see. Having been in her shoes as a planning Minister in the past, I realise that there is little that she can say on the specific points that I shall raise, because after the inquiry, which is about to start, the draft plan will move to her desk or that of one of her colleagues. However, the debate is an opportunity to present some of the points that she can bear in mind when the time comes and perhaps even put to the inspector.
	As I am sure the Minister knows, Surrey county council is a Conservative council. It is a good performing council in many respects, but it has spectacularly failed to cover itself in glory on one aspect of this matter. Some time back, Surrey entered into a private finance initiative agreement with an organisation called Surrey Waste Management, a derivative of SITA. The contract has a number of interesting points, but there are two that I shall mention.
	First, I find it intriguing that the waste management contract contains a requirement for two incinerator sites. That is written in black and white. I find this extraordinary because it immediately inhibits the flexibility of either side to react to changing circumstances. I have in mind the recent success of Surrey district councils in increasing recycling, thereby reducing demand. I foresee the ghastly possibility of Surrey having two huge incinerators without the sources of waste to fill them, and the company looking for waste from elsewhere to be trucked in.
	Secondly, it is of some concern to me that in the contract the costs related to any application by the contractor to build an incinerator or two are to be borne by the local authority, rather than by the contractor. I have a little bit of experience of local government and contracts with the private sector, and that seems to me a weeny bit strange, to put it mildly. To my mind, it instantly means that the council has an incentive to look for an easy and cheap route for progressing any application. As the Minister will be aware, in situations where a local authority is in effect the applicant, or has a particular interest in the progress of an application, there must be a so-called glass wall between the planning department and the rest of the council, particularly the service department. On reading an interview with Surrey's head of planning in a recent edition of  Planning, I was disturbed to find that the glass wall seems to have cracked or even crumbled.
	Surrey county council's first attempt at a waste plan was to insist on the contractor coming forward with suitable sites, instead of the council naming them. Clearly, thoughthe council did not seem to understand thisif one leaves the decision on sites to a private contractor, the economic issues tend to predominate. Two sites were proposed where proprietary access was simple. One of them was a little place called Capel in my constituency. At the time, I put it to the chief executive of the Environment Agency, Lady Young, who was appearing before the Select Committee on Communities and Local Government, that the Capel site had been chosen for economic expediency, rather than taking into account environmental issues. She agreed.
	The application for an incinerator at Capel was approvedjust. A furious but knowledgeable local group took the decision to judicial review. In November 2002, Mr. Justice Sullivan, who is very well versed in planning, quashed the application. In doing so, it would not be unfair to say that he was fairly damning of the council and its approach. One of the key decisions from the judicial review was that the application for an incinerator was premature. The council was directed to go back to the drawing board and to come forward with a new plan that actually named sites. It went through that procedure and came up with several sites, including Capel. All bar Capel were in the green belt, but many were already used in some way for waste. The council chose to put Capel at the head of its list merely because it is not in the green belt, ignoring the fact that it is right alongside an area of outstanding natural beauty. Other key issues, particularly that of proximity, appear to have been ignored. I found that surprising, because in quashing the previous application the court found that the council had erred in its failure to apply that principle. At a recent public meeting, the executive member responsible was questioned on the proximity principle. He brushed it to one side and said that it no longer applied because European Union legislation had superseded it. In fact, as the Minister will know, it has been strengthened by the EU regulation.
	I do not expect the Minister to know much of Surrey. The western and northern portions are urbanSpelthorne, Guildford and Woking run down the western side. The eastern side, particularly the south-eastern side, is very rural, with farmers making livings and belonging to the National Farmers Union. The most eastern and southerly point includes Capel. Bearing in mind the proximity principle, one would have expected Surrey county council to have found sites in the west, but in its wisdom its prime site was as far away as possible from the source of the waste produced in Surrey, while still being just within Surrey. If one asks why, one must conclude that there are some attractions to choosing that site from the council's point of view, especially if one is an executive member in a hurry to get an incinerator through the planning procedure, get it built and into action.
	The site is owned either by Surrey or SITA, the contractor. It is rural and fairly sparsely populated, hence the protests. The site is not in the green belt, especially if one ignores the adjacent area of outstanding natural beauty and the nearby site of special scientific interest. I believe that Surrey has again chosen, through its executive member, to accept commercial expediency over the environmental issues.
	The site is licensed for landfill. It was originally used for mining clay for bricks. Planning permission was given for the mining hole to be used for waste filling, but the site had to be restored to agricultural land by December 2004. There was a recent application by the contractor to extend that to 2008. Surrey county council's planning committee rejected that but took no enforcement action.
	It is even more interesting to note that Surrey county council has accepted a landscape impact report, which included examining the site some seven years ago. The report said that the site should never be considered for waste in the future. The council revalidated the same report earlier this year.
	In quashing the original application, Mr. Justice Sullivan made it clear that the court accepted that the council had erroneously treated the site as land with an existing waste use for the purposes of the plan. He confirmed that the council should have considered the site as greenfield. It appears to have ignored that. The quashed application was based on using Guildford as a collection site and trucking the waste to an incinerator at Capel. The vehicles that would have to be utilised to carry the waste would be large, for economic reasons, and it was estimated that some 80 vehicles would make the return trip from Guildford to Capel daily. There are two possible routes. One is through some fabulous villages with tiny streets. That route was finally rejected for the longer route of the A3, M25 and A24. Eighty trucks a day were to make that journey of approximately 60 miles there and back. The added difficulty, which was ignored, was that, as one approaches the Capel site, the A24 is a small, narrow, windy single carriageway with an appalling accident history. The addition of 160 truck movements daily would mean that sense had gone out of the window. One wonders whether the council has ever heard of the proximity principle.
	Let me consider the adverse effect on the ecology of the site. It is near Vann lake and Ockley woods, which are an SSSI. The actual site is a geological SSSI. Added to that, there arebless themgreat crested newts. Lack of time means that I must restrict the detail, but I must mention one specific matter, which is especially unusual.
	The Capel site is unique in that it is directly in the flight path of planes flying into Gatwick airport from a westward direction. The planes must pass a beacon on the Capel site at an altitude of 1,500 ft. Recent research from NASA has shown that aircraft of the size that fly into Gatwick flying over the chimney that would be required for dispersing the fumes of an incinerator would cause a downward draught that would drive all the fumes downwards. I have a video from NASA that I could lend or give to the Minister to show the effect. It is a dramatic video. At busy times, one plane lands or takes off from Gatwick every two to three minutes. The chimney plume would not work.
	If we consider other environmental issues, I cannot understand from my background in local government and in planning as a Minister responsible for planning why on earth Surrey county council has picked the site. In choosing it as the primary site, it has ignored the proximity principle, its own decisions about the restoration of the site, the consequences of the flight path at Gatwick airport, the surrounding landscape, the SSSIs, the AONB and the various environmental issues, including the newts. It is also now quite apparent that it has ignored the effect of the waste production, and the Government's PPS on rural development. It has ignored the access problems relating to the road network close to the site and the issues that were specifically expressed when the original application was quashed.
	I can assure the Minister that although there are not many of them, the people who live, farm and work in that part of the Surrey countryside are, to a man and a woman, vehemently upset at the prospect of having to live and deal with this huge tonnage of other people's waste from urban areas in Surrey or wherever else.

Angela Smith: I congratulate the hon. Member for Mole Valley(Sir Paul Beresford) on his success in securing this debate on the draft Surrey waste plan. It is obviously an issue about which he feels passionately. I also thank him for giving me an idea of some of the issues that he was going to raise. As a former planning Minister, he will be familiar with ministerial proprieties in relation to what we now call spatial planning matters. An independent planning inspector will be conducting the public examination into the Surrey waste plan, which will begin in February next year. If I were to comment on the merits of the plan and the proposals that it contains, there would be a risk that I would prejudice the outcome of that examination. The hon. Gentleman will therefore understand that I can talk about the waste plan in only the most general terms.
	I would like to begin by providing some context on waste management and waste planning. It is widely acknowledged that waste management is an issue of national importance, and there is a pressing need for new waste management facilities to be provided throughout the country. The Government's visionfor waste, embodying the principle of sustainable development, is to protect the environment and human health by producing less waste and by using it as a resource wherever possible. In particular, this means reducing reliance on landfill and making significant new investment in waste management facilities. Theoretically, the Government would prefer it if no waste at all were produced. Where it is produced, it should be re-used, recycled or composted wherever possible. However, we know that there is a need to manage what is left after recycling and composting, and our view is that energy from waste has an increasingly significant role in diverting waste away from landfill. In doing that, there are potential benefits to be exploited in terms of the security of energy supply, climate change and our national obligations under the landfill directive, as well as for sustainable development generally.
	The planning system is pivotal to the adequate and timely provision of the new facilities needed for all types of waste. Planning policy statement 10, published in July last year, underlines the importance of planning for, and consenting to, the necessary number and range of facilities to support sustainable waste management. The Government expect development plans to be up to date and fit for purpose.
	I should now like to widen the scope of the debate and say a few words about our reformed planning system, which will help to deliver the mix of development that communities need, in the right place, at the right time and in a faster, fairer and more flexible way. I hope that that will address some of the hon. Gentleman's concerns. Our reforms are designed to improve the integration between planning for housing, services and other infrastructure, including waste management. That is not an easy challenge to meet, and it places a great responsibility on regional and local planning bodies. We know that it involves taking difficult decisions, so we are asking local councils and their officers to show real leadership, backed up with the best support that the Government can offer.
	Collectively, our challenge is to bring the community on side. The community needs accurate information about the process in order to learn about the choices available and their implications. It is essential that members of the community are fully involved in the planning process, so that they understand that it is not possible to dump all their waste on someone else's doorstep. It is obvious that every human, every home and every business creates wasteindeed, almost every human activity creates waste. We just sometimes try to forget about it. The Planning and Compulsory Purchase Act 2004 introduced major legislative changes to the planning system, which we have underpinned with a programme of changing planning culture. We have made the planning system faster, fairer and more flexible.
	In the pastand too often in the presentindustry has complained that it is difficult to get planning permission and that the process takes too long. On the other hand, local communities and environmental non-governmental organisations feel that ill-considered proposals are railroaded through the system. Local planning authorities are often caught in the middle. In my experience, businesses often do not understand the local authority planning process and, likewise, local authorities do not always understand the pressures on business. Greater understanding between the two can smooth the entire process.
	The 2004 Act puts a much stronger emphasis on both the need for speed and the quality of decision making, while emphasising the importance of community consultation and involvement. The hon. Gentleman will know all about the duty to draw up statements of community involvement as part of local development frameworks, which makes sense. With often controversial waste schemes, it is critical that the public do not just object as a matter of principle. Planning authorities must engage and take the community with them as they assess the need for new facilities, identify suitable sites, scrutinise the environmental impacts and ensure open and transparent decision making. Experience has shown that that is a proven way of making faster and better decisions.
	That is the bigger picture that supports PPS10. As PPS10 says, positive planning has an important role to play in delivering a more sustainable approach. It confirms our belief, and enshrines in policy, that good planning strategies, regionally and locally, can help deliver sustainable waste management. Rather than seeing waste as a problem, we need to try to see waste as a resource. Disposal must be the last option, but one which must be catered for adequately.
	Good plans should provide a framework in which communities take more responsibility for their own waste, and enable sufficient and timely provision of waste management facilities to meet the needs of communities. It is possible to deliver the policy outlined in PPS10 by integrating waste management alongside other planning concerns, including housing. We need clear regional strategies and local development frameworks, which provide for waste management and ensure that the design and layout of new development takes waste management into account.
	On the whole, planning applications for waste proposals are determined favourably: the approval rate approaches 90 per cent., which is higher than that for housing. The system is not working as smoothly as it should, however, and decisions are too often taken in a heated, adversarial climate. The end result is that we are still not getting enough waste facilities on the ground. There is a great need for local authorities to engage more with their communities earlier in the development plan process.

Paul Beresford: Does the Minister agree that, apart from the issue of fairness to those in other areas, it is sensible for environmental reasons to deal with waste close to its source?

Angela Smith: The point about communities considering how to deal with their own waste is an important one. Of course, transporting waste increases its environmental impact. Obviously, every county council will have to make plans on the basis of what suits its area best. It is important to engage local people on all those matters, including environmental and transport issues.
	As the hon. Gentleman said, Surrey county councilalthough he disagrees with its conclusionshas been busy preparing its draft waste plan under the new local development framework system, which includes specific site allocations. The plan was formally submitted to the Secretary of State in June, and will be one of the first waste development plan documents to be examined under the new system.
	I am grateful to the hon. Gentleman for indicating in advance which issues he wished to raise this evening. As we have heard, Surrey county council has included a proposal within its plan for an energy-from-waste plant at a site known as the Clockhouse Brickworks in Capel near Dorking, which is in his constituency. The waste plan explains that because the site is on the southern fringe of Surreyas he saidand therefore away from the main centres of population, the plant may be expected to be of relatively small capacity. Fromhis comments, I do not think that that is his understanding. I can therefore well understand that he and his constituents have genuine concerns about the proposal. We all produce waste, but dealing with it is unpopular. The planning system must therefore help us to balance those difficult, competing interests.
	In this case, the planning inspector will preside over the Surrey public examination, listen to and read the arguments for and against the proposal and come to a judgment, which will be binding on Surrey county council. That point requires some clarification. Under our system of local development frameworks, the purpose of the examination is not to debate the particular merits of individual policies or proposals but to determine whether the plan is soundwhether it has a robust basis, in terms of its content and the process by which it has been produced. It must also be founded on robust, credible evidence with an appropriate level of community involvement. It will be assumed that a local authority's plan is sound unless it is shown to be otherwise as a result of evidence considered at the examination.
	I understand that the hon. Gentleman did not make any representations on the Surrey waste plan during the two formal six-week consultation periods. That is unfortunate. The last consultation period closed on18 August, and it is now too late to submit comments for consideration at the examination. The hon. Gentleman may still wish to make his feelings known, but unfortunately there is every chance that the county council and the inspector will rule them inadmissible. I cannot intervene in the process, because it is possible that I would end up in court if I tried to do so. Clearly the hon. Gentleman has nothing to lose from airing his views, but let me suggest two possible alternatives to writing what could prove to be an abortive letter.
	The inspector can request the attendance at the examination of any person or organisation he considers to be needed to enable the soundness of the plan to be determined. That applies whether or not the person or organisation has previously made representations on the plan. The hon. Gentleman could write to the inspector to ask whether his presence at the examination could help the inspector to reach a decision. Alternatively, he could approach a person or organisation whose views are aligned with his ownI am sure he knows of such people or organisations in his constituencyand offer to speak on behalf of that party at the examination, if comments have been submitted at an earlier stage.
	A planning application for an energy-from-waste plant at Capel is being prepared, and I am informed that it is likely to be submitted to Surrey county council early next year. The hon. Gentleman and his constituents will have an opportunity to look at the details of the scheme, and to make their views known.
	I hope that I have described a course of action that the hon. Gentleman can take, while putting the issues involved in a wider context.
	 Question put and agreed to.
	 Adjourned accordingly at twenty-seven minutes past Seven o'clock.